By Libby George<\/p>\n
LONDON, Dec 3 (Reuters) – The gap between developing nations’ debt servicing costs and new financing hit a more than 50-year high of $741 billion between \u200b2022 and 2024, the World Bank said on Wednesday, urging countries to use \u200cthe more relaxed global financing conditions to bring their houses in order.<\/p>\n<\/p>\n
In its annual International Debt Report, the \u200cWashington-based lender also found that overall interest payments had hit a fresh record of $415.4 billion in 2024 despite some relief from falling global interest rates.<\/p>\n
“Global financial conditions might be improving, but developing countries should not deceive themselves: they are not out of danger,” World Bank Chief Economist \u2060Indermit Gill said in the \u200creport, adding that debt build-up is continuing “sometimes in new and pernicious ways.”<\/p>\n
Bond markets reopened for most countries as the long global interest rate hiking \u200dcycle ended, paving the way for billions of dollars in new issuance. But this came at a cost, with interest rates on bond debt near 10% – roughly double those before 2020 – and options \u200bfor low-cost financing dwindling.<\/p>\n
Emerging nations are also increasingly turning to domestic debt markets to \u200cfund themselves. In 50 countries, domestic debt grew at a faster pace last year than external debt.<\/p>\n
The bank said this was a sign of evolving local credit markets but cautioned that it could squeeze local bank lending to the private sector and potentially raise the cost of refinancing due to shorter maturities.<\/p>\n
Emerging markets reworked nearly $90 billion of external debt in \u20602024 – a 14-year high – including restructurings in Ghana, Zambia, \u200bSri Lanka, Ukraine and Ethiopia and debt forgiveness in \u200bHaiti and Somalia.<\/p>\n
Meanwhile, net flows of bilateral lending collapsed 76% to $4.5 billion, a level not seen since the 2008 financial crisis, forcing countries to seek \u200dmore costly private financing.<\/p>\n
While \u2060multilateral lending rose and the World Bank itself lent a record $36 billion, 54% of low-income nations are now in debt distress or facing high debt risks.<\/p>\n
“Policymakers everywhere \u2060should make the most of the breathing room that exists today to put their fiscal houses in order \u200cinstead of rushing back into external debt markets,” Gill said.<\/p>\n
(Reporting by Libby \u200cGeorge; Editing by Karin Strohecker and Joe Bavier)<\/p>\n","protected":false},"excerpt":{"rendered":"By Libby George LONDON, Dec 3 (Reuters) – The gap between developing nations’ debt servicing costs and new…\n","protected":false},"author":3,"featured_media":422297,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12],"tags":[64,197102,197100,106498,79,197103,267,197101,67,132,68,1205,197104],"class_list":{"0":"post-422296","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-debt-servicing","10":"tag-developing-nations","11":"tag-domestic-debt","12":"tag-economy","13":"tag-indermit-gill","14":"tag-interest-rates","15":"tag-international-debt","16":"tag-united-states","17":"tag-unitedstates","18":"tag-us","19":"tag-world-bank","20":"tag-world-bank-chief-economist"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/115656956663252755","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/422296","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=422296"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/422296\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/422297"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=422296"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=422296"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=422296"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}