Global Debt Crisis Warning from World Bank. 🌍🏦
The World Bank has issued a stark warning about the rising global interest rates, leading impoverished countries to pay a record $88.9 billion in public debt last year.
The International Debt Report reveals that 75 eligible countries, supported by the International Development Association, paid a record $88.9 billion in public debt in 2022.
Over the last decade, the interest payments of these countries quadrupled, reaching an all-time high of $23.6 billion in 2022.
The report projects that the total debt payment costs for the poorest 24 countries are expected to increase by up to 39% in 2023 and 2024.
In a period of the largest 40-year increase in global interest rates, developing nations incurred a record expenditure of $443.5 billion to meet their public debt obligations..
The report emphasizes that debt repayments, including principal and interest, increased by 5% compared to the previous year for all developing nations.
Rising interest rates are identified as amplifying debt vulnerabilities, with approximately 60% of low-income countries facing or already within a high-risk debt situation.
Specifically, the report notes that Turkey's gross external debt rose from $437.5 billion in 2021 to $458.7 billion by the end of 2022.
The World Bank's warning signals a critical juncture for impoverished nations, urging global attention to address the challenges posed by escalating debt burdens in the face of surging interest rates. The impact is widespread, demanding international cooperation to mitigate the risks and foster sustainable solutions.
