Abstract
The new government borrowing in 2013 has mainly been used for paying off the existing debt principal and interest. Receipts from borrowing have not been used for capital investment financing for quite a long time. High expenses for debt principal and interest repayment are due to huge budget deficits which increase credit risk and, consequently, raise borrowing costs and yields on government bonds. Reducing the deficit and public debt by 2016 is not included in the current Government's fiscal consolidation plans, which could lead to further growth in yields on new government bond issues.
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