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The size of government debt alone does not reveal a country’s ability to repay. The risks also depend on interest rates, maturities, the currency in which borrowing is denominated, and the economy’s capacity to grow and generate revenue. Debt service is distinct from the stock of debt: it includes principal repayments and interest. Governments may refinance maturing debt with new loans, while borrowing costs that rise faster than economic growth can squeeze spending on public services and investment. The World Bank reported that, between 2022 and 2024, low- and middle-income countries paid about $741 billion more to service their external debt than they received in new financing. The International Monetary Fund, meanwhile, noted that interest payments consume around 73% of the Egyptian government’s revenue. The article concludes that debt becomes a threat when it drains resources and limits the ability to meet citizens’ needs—not simply when it reaches a particular percentage of GDP.
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