Most G7 countries are now spending more on interest payments than on defence, according to Scope Ratings. The ratings agency said Germany and Canada are the only exceptions, meaning the other G7 members have reached a point where debt-servicing costs are taking a larger share of public spending than military budgets.
The finding highlights how higher borrowing costs are affecting major advanced economies. When interest expenses overtake defence outlays, it can signal growing pressure on government finances, especially as countries try to balance debt management with other spending priorities.
Scope Ratings' assessment adds to wider concerns about the budget impact of elevated rates and large debt loads across the developed world. For policymakers, the comparison between interest costs and defence spending underlines how quickly financing expenses can reshape fiscal choices.
While Germany and Canada still remain below that threshold, the broader picture across the G7 points to a significant shift in public finances. The report suggests that for most of the group, debt interest is becoming an increasingly important part of national spending.
