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Rising Debt burdens, the Impact on Public Spending, and the Coronavirus Crisis

Even before the coronavirus crisis, since 2011 debt payments have grown rapidly for lower income countries. In this paper we analyse debt payments for 63 countries with figures available from the IMF and World Bank. We find that average public external debt service has increased from a low of 5.5% of government revenue in 2011 to 12.4% in 2019, an increase of 125%. Based on IMF and World Bank projections, we estimate that payments would have increased to between 12.8% and 17.4% of government revenue by 2022 before the impact of the COVID crisis. The coronavirus crisis has dramatically worsened the debt situation for many countries.