World Bank’s Latest International Debt Report

Santhosh Kumar 16/12/2023
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This is a comprehensive mind map with below hierarchical information:- World Bank’s Latest International Debt Report December 2023 News Release Date December 13, 2023 Record Debt Service $443.5 billion in 2022 50th Anniversary International Debt Report When Report Period Data as of end-2022 Why Global Interest Rate Surge Biggest in four decades Debt Vulnerabilities Intensified in developing countries What/Highlights Debt Service Payments Include principal and interest Debt Servicing Cost Increase 5% over previous year IDA Eligible Countries Paid $88.9 billion in 2022 Interest Payments Quadrupled $23.6 billion in 2022 Debt Servicing Costs Projection Expected to increase by 39% Sovereign Defaults 18 in 10 countries over three years Low-Income Countries 60% at high risk of debt distress Variable Interest Rates Debt More than a third of external debt DSSI Accumulated Costs Principal, interest, and fees US Dollar Strength Increases payment costs Financing Options Decreased in 2022 Private Creditors Reduced involvement World Bank Support Provided significant low-cost financing IDR 50th Edition Expanded analytical framework Indian Context Resilient Growth 7.2% in FY22/23 Global Challenges High interest rates, geopolitical tensions GDP Forecast FY23/24 Expected to be 6.3% Inflation Spiked to 7.8% in July Fiscal Consolidation Deficit projected to decline External Account Current deficit to narrow to 1.4% Where Developing and Poor Countries Global scope Who Indermit Gill World Bank Group Chief Economist Haishan Fu Chief Statistician, World Bank How Debt Transparency Essential for management and sustainability Data Role Guides debt restructuring Public Borrowing Needs accountable, rules-based practices Significance Insight into Global Debt Over 50 years of data Economic Stability Promotion Through data and management tools Challenges High Debt Levels Lead to economic crises Investment in Critical Areas Diverted due to debt servicing Way Forward Coordinated Action By governments, creditors, and institutions Debt Sustainability Tools Need for improvement Swift Restructuring Arrangements To prevent economic downturns Debt Management Transparency Key to avoiding crises

The World Bank’s International Debt Report of December 2023 revealed a record high in debt service payments by developing countries, totaling $443.5 billion in 2022, influenced by the largest surge in global interest rates in four decades. This surge has significantly affected developing nations, with debt service payments increasing by 5% from the previous year. The report, marking its 50th edition, highlights the increasing vulnerabilities in developing countries, including an alarming number of sovereign defaults and the high risk of debt distress in low-income countries. It emphasizes the importance of debt transparency and management for economic stability and sustainable growth. In the context of India, despite global challenges, the country has shown resilient growth, with a 7.2% growth rate in FY22/23 and an expected GDP growth of 6.3% for FY23/24, albeit with concerns over inflation and fiscal consolidation challenges.

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Categories: External Sector/Open Economy/Globalisation, Indices/Reports, Public Finance
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