Debt stock of developing economies rises to $9trn – World Bank

The World Bank on Tuesday warned that the external debt stock of developing economies has doubled multiple times in a decade to $9 trillion in 2021, signalling high risk of debt crisis in the countries.
The President of the World Bank, David Malpass, cautioned that the world is facing a fifth wave of debt crisis.
Several countries are already suffering from debt crisis, causing high inflation, rising interest rates, high burden of debt servicing, increasing poverty rate, and perennial budget deficit.
The World Bank noted that global growth is slowing sharply this year, with an increased risk of world recession in 2023 amid “one of the most internationally synchronous episodes of… policy tightening” in 50 years.
Malpass stated: “A comprehensive approach is needed to reduce debt, increase transparency, and facilitate swifter restructuring — so countries can focus on spending that supports growth and reduces poverty.”
The World Bank President declared: “For developing countries, this is a grim outlook… access to electricity, fertilizer, food and capital is likely to remain limited for a prolonged period.”
Malpass added that under-investment in businesses is blocking future growth.
The World Bank, in a release, said that the poorest countries eligible to borrow from its International Development Association (IDA) now spend more than a tenth of their export revenues to service their long-term public and publicly guaranteed external debt. He noted that this is the highest proportion since 2000.
According to the World Bank, “on the surface, debt indicators seem to have improved in 2021. This was not the case for IDA countries.”