The World Bank says developing countries spent a record $443.5 billion to service external debt in 2022 and that will rise 10% this year and the next. For the poorest countries, that’s $88.9 billion with the total to surge by 40% in 2023-24, they say.
Those debt burdens threaten to swap the capacity to repay and could lead to a debt crisis.
The best thing that could happen would be for the Fed to start cutting rates as a prolonged period of high rates would be ‘disasterous’ for emerging markets.
It’s rare for the smallest countries to cause ripples in the larger financial system but those places are an important source of global growth and resource demand for the decades ahead.
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- Source: https://www.forexlive.com/news/world-bank-warns-that-poorest-countries-face-increasing-risk-of-debt-crisis-20231213/
