World Bank: Poorest countries facing worst debt since 2006 – DW – 10/14/2024

The World Bank published a new study late on Sunday highlighting 26 countries that “are in deeper debt than at any other time since 2006.”

The list includes Afghanistan, Yemen, Syria, and North Korea. Most of the other nations are in sub-Saharan Africa, and include Ethiopia and Chad.

With an annual per capita income of less than $1,145 (€1,050) a year, the World Bank said these countries “are poorer today on average than they were on the eve of COVID-19, even though the rest of the world has largely recovered.”

The report also found that these countries are heavily reliant on the World Bank’s International Development Association (IDA) to prop up their economies.

“At a time when much of the world simply backed away from the poorest countries, IDA has been their lifeline,” World Bank chief economist Indermit Gill said in a statement.

“Over the past five years, it has poured most of its financial resources into the 26 low-income economies, keeping them afloat through the historic setbacks they suffered.”

Bearing the brunt of climate change

On average, government debt is now 72% of economic output in these countries, the highest that number has been in 18 years.

The report also noted that many of these countries are much more prone to natural disasters, which are increasing due to climate change, and instability.

Natural disasters caused annual losses averaging 2% of economic output between 2011 and 2023, the study found. That number is five times higher than for low-middle-income nations.

The World Bank also noted that the costs of addressing climate change are higher for these countries than developed countries, which often already have robust infrastructure in place.

es/zc (dpa, Reuters)