Please note: The algorithm descriptions in English have been automatically translated. Errors may have been introduced in this process. For the original descriptions, go to the Dutch version of the Algorithm Register.
Calculating future interest expenses
- Publication category
- Other algorithms
- Impact assessment
- Field not filled in.
- Status
- In use
General information
Theme
Begin date
Contact information
Responsible use
Goal and impact
When financing public debt, interest is paid to investors. These interest charges impact the budget and this model maps out the future interest charges under different scenarios.
Considerations
By forecasting interest costs, it shows the impact on the budget and how sensitive interest costs are to rising interest rates, for example.
Human intervention
Our expected government bond issuance pattern cannot be fully captured by an algorithm. Therefore, outcomes are always tested for plausibility by an employee.
Risk management
Misjudging the sensitivity and magnitude of our interest costs can lead to decision-making with a financial risk. However, this model is only 1 of many sources of information used in financing plan decision-making. As a result, the risk of wrong decision-making is relatively low. Other sources of information include the financing gap, issuance calendars and market demand. In addition, this model is also externally validated for correctness.
Legal basis
Our mission is to finance the Dutch state at the lowest possible cost and at acceptable risk. The interest costs and their underlying sensitivity are made transparent with this model.
Links to legal bases
Elaboration on impact assessments
No personal data are used in this model. The main data points are current interest rates (public information), current government debt (public information), expected cash deficits of the state (confidential information) and which government bonds the ministry plans to use to finance these deficits (confidential information)
Operations
Data
The main data points are current interest rates (public information), current government debt (public information), expected cash deficits of the state (confidential information) and which government bonds the ministry plans to use to finance these deficits (confidential information)
Technical design
Based on the deficits and our own strategy, we estimate the development and build-up of future government debt. Based on this future public debt, an indication of future interest expenses can be made.
External provider
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