Washington, (Asian independent) The total external debt of the world’s poorest countries increased by 9.5 per cent to a record $744 billion dollars in 2019, according to the World Bank.
“Before the onset of the Covid-19 pandemic, rising public debt levels were already a cause for concern, particularly in many of the world’s poorest countries,” Xinhua news agency quoted the multilateral lender as saying in a statement during the annual meetings of the World Bank Group and International Monetary Fund (IMF) on Monday.
The G20 endorsed the Debt Service Suspension Initiative (DSSI) in April this year to help up to 73 of the poorest countries manage the impact of the pandemic, allowing them to suspend payments on official bilateral debt until the end of 2020, the World Bank said.
World Bank Group President David Malpass haf previously urged the G20 countries to extend the time frame of the DSSI through the end of 2021 and commit to give the initiative as broad a scope as possible.
According to the World Bank Group’s latest International Debt Statistics (IDS) report released on Monday, the total external debt of countries eligible for the G20 debt relief program climbed to a record last year, “highlighting an urgent need for creditors and borrowers alike to collaborate to stave off the growing risk of sovereign-debt crises triggered by the Covid-19 pandemic”.
The pace of debt accumulation for these countries was nearly twice the rate of other low- and middle-income countries in 2019, the report noted.
“It’s been very important that leaders of poorest nations speak up and speak out about the need for a lighter debt burden from the creditor nations,” Malpass said on Twitter on Monday.
“That dialogue hasn’t been as robust yet as I think is necessary to move this process along,” the World Bank chief added.
Finance ministers and central bank governors from the G20 economies are scheduled to meet virtually on Wednesday, and were expected make a decision on further extension of debt service relief.