The Strategist

World Bank: Cost of servicing state debt in developing countries hits record $443.5B

12/14/2023 - 02:26

The World Bank's newly published yearly report on global debt states that in 2022, developing nations would pay a record $443.5 billion—5% more than the previous year—to service their public debt.

Ikan Kekek
Ikan Kekek
For the 24 poorest nations, the cost of servicing their public debt will increase by 39% in 2023 and 2024. 18 nations, including Zambia, Ghana, and Sri Lanka, have reportedly missed payments on their national debt in the last three years, according to the research.

Many nations are facing crises as a result of record debt levels and rising interest rates, according to Indermit Gill, a senior economist and vice president at the World Bank Group with expertise in developing market economies.

Additionally, according to the World Bank, private lenders will get $185 billion in loan repayments from developing nations in 2022, more than they loaned out during that time. According to Mr. Gill, this is due, in part, to the fact that international banks are now less inclined to lend to developing nations when interest rates are rising in wealthy nations, making loans there more profitable than they formerly were. Consequently, the cost of borrowing for developing nations has decreased, falling by 23% to $371 billion in 2022.