World Bank: Low, middle income countries’ debts hit $7.8tr

Although on average the external debt burden of low- and middle-income countries was moderate, several countries have been on a deteriorating debt trajectory since 2009, the report indicates. The share of low- and middle-income countries with debt-to-Gross National Income (GNI) ratios below 30 per cent has shrunk to 25 percent, down from 42 per cent 10 years ago. Similarly, the share of countries with high debt-to-export ratios has climbed.

“To grow faster, many developing countries need more investment that meets their development goals,” World Bank Group President David Malpass said. ”Debt transparency should extend to all forms of government commitments, both explicit and implicit. Transparency is a critical part of attracting more investment and building an efficient allocation of capital, and these are essential in our work to improve development outcomes.”

Debt stocks were driven up by a 15 per cent jump in China, fueled by investor appetite for renminbi-denominated assets. Excluding the ten largest borrowers (Argentina, Brazil, China, India, Indonesia, Mexico, the Russian Federation, South Africa, Thailand, and Turkey), external debt stocks rose 4 percent. Sub-Saharan countries excluding South Africa saw debts stocks swell by 8 percent on average in 2018, and over half the countries in the region have seen external debt stocks double since 2009.