Denmark
Government Debt and Interest Costs are Very Low in Denmark
The government debt and interest costs are very low in Denmark. After reaching a peak in 1996 the debt has continued to decline year after year as th chart shows below:
Source: National Bank, Denmark
“Recent years have witnessed a significant reduction of the central-government debt, from DKK 600 billion in 1997 to DKK 195 billion in 2008, corresponding to a decline from 53 per cent of GDP to 11 per cent of GDP”. This is very good since in many of the industrialized countries such as the US, UK, France, Spain, etc. government debt has been rising for many years now.
Incidentally Denmark now has the lowest unemployment rate in the EU at just 4.10%. In the US, unemployment rate has reached 1o.2% which is more than double that of Denmark’s.
As the total government debt has fallen over the years interest payments on debt has also decreased as shown below.”On account of the pronounced debt reduction since 1997 and lower market interest rates, the central government’s interest costs have declined from DKK 43.5 billion to DKK 11.6 billion over the same period, equivalent to a fall from 3.9 to 0.7 per cent of GDP”
Comparatively the US spends about 6% of GDP on interest payments alone each year.
