US Government's Annual Interest Costs Exceed $1 Trillion, Up $80 Billion

The US federal government's debt burden has surpassed 1 trillion dollars (approx. 1,330 trillion won) this year.

According to an announcement by the US Department of the Treasury, the federal government's net interest costs for fiscal year 2026 (October 2025 – September 2026) reached 1.05 trillion dollars (approx. 1,400 trillion won), marking an 8.2% increase—or 80 billion dollars (approx. 107 trillion won)—from fiscal year 2025 (970 billion dollars).

This figure significantly exceeds defense spending, which rose 6% to 917 billion dollars.

This increase in net interest costs stems from a substantial rise in debt subject to interest payments alongside higher interest rates.

Bloomberg reported that debt subject to interest payments stands at 32 trillion dollars, having ballooned by about 10 trillion dollars compared to five years ago.

Additionally, the average interest rate paid by the federal government on marketable Treasury securities this year was 3.52%, more than double the 1.47% recorded five years ago.

The federal government budget deficit for fiscal year 2026 came to 1.99 trillion dollars (approx. 2,660 trillion won), an increase from the 1.78 trillion dollars recorded in the previous fiscal year.

Reuters reported that this is the largest scale since fiscal year 2021 (2.77 trillion dollars), when the COVID-19 pandemic occurred, and the third-largest on record.

Reuters also reported that a Treasury Department official estimated the budget-deficit-to-GDP ratio for fiscal year 2026 at 6.2%.

The ratio stood at 5.8% in the previous fiscal year.
※ Please note: This article was translated by AI and may contain errors.