Rising interest costs are squeezing government budgets to the point where fiscal space for stimulating economic growth at home is shrinking, according to financial analysts. Economists warn that the burden of servicing debt is crowding out funds that could otherwise support consumer spending or public investment. With borrowing expenses climbing, policymakers face tougher trade-offs between debt management and efforts to boost domestic demand. The outlook raises questions about how long central banks can balance monetary policy amid tightening financial conditions.
Mounting interest payments restrict headroom to revive domestic demand, say experts
