The debt burden of the world’s low-income countries rose 12 percent to a record $860 billion in 2020 as countries responded to the COVID-19 crisis with massive fiscal, monetary, and financial stimulus packages, the World Bank said in a report released Monday.
World Bank President David Malpass said the report showed a dramatic increase in the debt vulnerabilities facing low- and middle-income countries and called for urgent steps to help countries reach more sustainable debt levels.
“We need a comprehensive approach to the debt problem, including debt reduction, swifter restructuring and improved transparency,” Malpass said in a statement accompanying the new International Debt Statistics 2022 report.
“Sustainable debt levels are vital for economic recovery and poverty reduction,” he said.
The report said the external debt stocks of low- and middle-income countries combined rose 5.3 percent in 2020 to $8.7 trillion, affecting countries in all regions.