WB: developing countries’ debt stocks increased to USD-7.8-tn in ’18

WASHINGTON, The World Bank said Wednesday that total external debt of low and middle-income countries rose 5.3 percent to USD 7.8 trillion last year, while net debt flows from external creditors dropped 28 percent to USD 529 billion.

The World Bank’s International Debt Statistics 2020 indicated, “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.” It added that the share of low and middle-income countries “with debt-to-GNI (Gross National Income) ratios below 30 percent has shrunk to 25 percent, down from 42 percent ten years ago.” It noted, “Similarly, the share of countries with high debt-to-export ratios has climbed.” According to the report, debt stocks were driven up by a 15 percent jump in China, “fueled by investor appetite for renminbi-denominated assets.” It noted that “excluding the ten largest borrowers, Argentina, Brazil, China, India, Indonesia, Mexico, Russia, South Africa, Thailand and Turkey, external debt stocks increased four percent.

It added Sub-Saharan countries, excluding South Africa, “saw debts stocks swell by eight percent on average in 2018 and over half the countries in the region have seen external debt stocks double since 2009.” In this regard, World Bank Group President David Malpass said “to grow faster, many developing countries need more investment that meets their development goals.” He stressed that “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,” he affirmed.

Source: Kuwait News Agency