Share of government spending going to interest payments

Interest payments include interest payments on government debt (including long-term bonds, long-term loans, and other debt instruments) to domestic and foreign residents. This indicator is expressed as percentage of total expenses which is any decrease in net worth resulting from a transaction.

Aggregation method:

Median

Statistical concept and methodology:

Methodology: Government Finance statistics are compiled in accordance with international standards: Government Finance Statistics Manual, 2014 or 2001 editions. Specific information on how countries compile their Government Finance statistics can be found on the IMF website: https://dsbb.imf.org/ Statistical concept(s): Government Financial Statistics are compiled within a conceptual and reporting framework suitable for analyzing and evaluating fiscal policy, especially the performance of the general government sector and the broader public sector of any economy.

Development relevance:

This indicator is related to Government finance statistics. Government finance statistics provide a detailed snapshot of a government's fiscal operations and health. They encompass data on revenue, expenditures, deficits, and debt levels, which are essential for crafting fiscal policy, budget planning, and economic forecasting. These statistics help policymakers manage public finances effectively, make informed decisions on taxation and spending, and set priorities for resource allocation. For investors, analysts, and the international community, government finance statistics serve as key indicators of a country's economic stability and creditworthiness. They also play a crucial role in ensuring transparency and accountability, as they allow citizens and oversight bodies to track how public funds are managed and spent, fostering democratic engagement and governance. More specifically, this indicator is related to the expense side of government finance statistics. The expense side of government finance statistics provides helpful detailed information on how a government spends its funds, including expenditures on public services, social programs, infrastructure, and debt servicing. This data is critical for assessing the effectiveness and efficiency of government spending and for ensuring that resources are being allocated to priority areas that support economic and social development. It also helps in evaluating the fiscal sustainability of government operations, as persistent high levels of spending relative to revenue can lead to budget deficits and increasing public debt. For citizens, understanding how their government is spending money is key to holding it accountable and ensuring that public funds are used in the public interest. For investors and credit rating agencies, the expense data is important for assessing a country's fiscal health and the risks associated with its sovereign debt.

Limitations and exceptions:

For most countries central government finance data have been consolidated into one account, but for others only budgetary central government accounts are available. Countries reporting budgetary data are noted in the country metadata. Because budgetary accounts may not include all central government units (such as social security funds), they usually provide an incomplete picture. In federal states the central government accounts provide an incomplete view of total public finance.

Data on government revenue and expense are collected by the IMF through questionnaires to member countries and by the Organisation for Economic Co-operation and Development (OECD). Despite IMF efforts to standardize data collection, statistics are often incomplete, untimely, and not comparable across countries.