Debt in Low-Income Countries
Debt vulnerabilities in low-income countries have increased substantially in recent years. Since 2013, median government debt has risen by about 20 percentage points of gross domestic product and increasingly comes from non-concessional and private sources. As a result, in most low-income countries, interest payments are absorbing an increasing proportion of government revenues. The majority of low-income countries would be hard hit by a sudden weakening in trade or global financial conditions given high levels of external debt, lack of fiscal space, low foreign currency reserves, and undiversified exports. A proactive effort to identify and reduce debt-related vulnerabilities is a priority for many low-income countries. Policy makers should focus on mobilizing domestic resources, improving debt transparency, and strengthening debt management practices. These efforts should be complemented by measures to strengthen fiscal frameworks, improve the efficiency of public expenditures and public investment management, and develop domestic financial systems.
| Main Authors: | , , , |
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| Format: | Working Paper biblioteca |
| Language: | English |
| Published: |
World Bank, Washington, DC
2019-03
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| Subjects: | DEBT, LOW-INCOME COUNTRIES, DEBT MANAGEMENT, DEBT VULNERABILITIES, NON-CONCESSIONAL DEBT, FINANCIAL MARKETS, INTEREST RATE, |
| Online Access: | http://documents.worldbank.org/curated/en/378031553539256399/Debt-in-Low-Income-Countries-Evolution-Implications-and-Remedies https://hdl.handle.net/10986/31453 |
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| Summary: | Debt vulnerabilities in low-income
countries have increased substantially in recent years.
Since 2013, median government debt has risen by about 20
percentage points of gross domestic product and increasingly
comes from non-concessional and private sources. As a
result, in most low-income countries, interest payments are
absorbing an increasing proportion of government revenues.
The majority of low-income countries would be hard hit by a
sudden weakening in trade or global financial conditions
given high levels of external debt, lack of fiscal space,
low foreign currency reserves, and undiversified exports. A
proactive effort to identify and reduce debt-related
vulnerabilities is a priority for many low-income countries.
Policy makers should focus on mobilizing domestic resources,
improving debt transparency, and strengthening debt
management practices. These efforts should be complemented
by measures to strengthen fiscal frameworks, improve the
efficiency of public expenditures and public investment
management, and develop domestic financial systems. |
|---|