The world is facing a "fifth wave of debt crisis,"
World Bank
President David Malpass warned Friday, calling for more support for countries
in distress.
اضافة اعلان
The pandemic forced many countries to take on more borrowing, and the World
Bank and International Monetary Fund have warned that many are already facing
or at risk of debt distress amid soaring global inflation and rising interest
rates.
"I'm worried about the debt levels, worried about the individual
countries," Malpass told reporters.
"In 2022 alone, around $44 billion in debt service payments from
bilateral and private debt service have become due" in some of the poorest
countries, bigger than the foreign aid flows the countries could hope for, he
said.
"Right now we're in the midst of what I think is a fifth wave of debt
crisis."
Speaking days before policymakers gather in Washington for the annual
meetings of the IMF and World Bank, Malpass called for "radically more
transparency" from creditors and borrowers on the debt levels.
He has long called for China, a major creditor to low-income nations, to be
more open about the lending and more active in efforts to restructure debt, a
process that has struggled to gain traction.
His comments come at a difficult time for the world economy, which is
grappling with surging inflation and rising interest rates that threaten to
ripple around the globe and derail nascent recoveries.
Some observers have warned that aggressive interest rate hikes by major
economies could trigger a global recession, but policymakers say allowing high
inflation to take hold would be even worse.
"It's very important, as we face these financial crises around the
developing world, that we recognize the supreme importance of the advanced
economies in terms of restoring growth and moving towards a faster growth
environment," Malpass said.
Developing countries also need more capital flows, and although the World
Bank is expanding help for countries, it is "simply not enough," he said.
According to the World Bank, there have been four waves of debt accumulation
in the global economy since 1970, and have generally sparked financial crises
in many emerging and developing economies.
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