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The debt of the world's 26 poorest countries reached an 18-year high
The debt of the 26 poorest countries has reached an 18-year high, they are becoming increasingly vulnerable to natural disasters and other shocks.
This is stated in the new reports World Bank, writes Reuters.
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According to the report, the 26 poorest economies, with annual per capita income of less than $ 1,145, are increasingly dependent on IDA grants and loans with almost zero interest rates, as market funding has largely run out.
The average of their debt-to-GDP ratio is 72%, which is the highest in the last 18 years, and half of these countries are either already in a debt crisis or are at high risk of falling into it.
Most of the countries studied in the report are located in sub-Saharan Africa, such as Ethiopia, Chad and the Congo, but the list also includes Afghanistan and Yemen.
Natural disasters have also taken a greater toll on these countries over the past decade. Between 2011 and 2023, natural disasters were associated with average annual losses of 2% of GDP, five times the average among lower-middle-income countries, pointing to the need for much higher investment, the World Bank said.
The report also recommended that these economies, which have large informal sectors operating outside their tax systems, do more to help themselves. This includes improving tax collections by simplifying taxpayer registration and tax administration and improving the efficiency of public spending
Two-thirds of the 26 poorest countries are in armed conflict or have difficulty maintaining order due to institutional and social instability, which hinders foreign investment.
Almost all of these countries export raw materials, which exposes them to frequent cycles of rise and decline.
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