A latest report by the World Bank reveals that developing countries spent a record US$443.5 billion to service their external public and publicly guaranteed debt in 2022.
The World Bank’s latest International Debt Report according to a statement made available to the Zambia Monitor showed that the increase in costs shifted scarce resources away from critical needs such as health, education, and the environment.
“Debt-service payment which include principal and interest increased by five percent over the previous year for all developing countries,” it stated.
The 75 countries eligible to borrow from the World Bank’s International Development Association (IDA) which supports the poorest countries paid a record US$88.9 billion in debt-servicing costs in 2022.
Over the past decade according to the report , interest payments by these countries have quadrupled, to an all-time high of US$23.6 billion in 2022.
“Overall debt-servicing costs for the 24 poorest countries are expected to balloon in 2023 and 2024 by as much as 39 percent,” the report stated.
Commenting on the report, Indermit Gill, World Bank Group’s Chief Economist and Senior Vice President observed that record debt levels and high interest rates had set many countries on a path to crisis.
“Every quarter that interest rates stay high results in more developing countries becoming distressed and facing the difficult choice of servicing their public debts or investing in public health, education, and infrastructure,” Indermit said.
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