India, Oct. 6 -- Goldman Sachs has warned that rising US interest rates could make the country's huge debt problem even worse. The investment bank said persistently high rates could increase the cost of servicing the US national debt and put more pressure on government finances.

Goldman Sachs strategist Pierfrancesco Mei said US debt-to-GDP could reach 132% by 2035 if interest rates stay higher for longer. That would be 10 percentage points above Goldman Sachs' baseline forecast, according to a new note released Tuesday.

Higher interest rates would increase the amount of money the US government has to spend on interest payments. Goldman Sachs said interest expense as a share of GDP is an important measure because it shows how much money...