The Bank estimates that after a year of rebound, to 5.5% in 2021, global growth should slow to 4.1% in 2022 and 3.2% in 2023. In the process, the institution warns of the risks for the year to come: the return of inflation, the fear of new variants and the danger of seeing poor countries experiencing a new debt crisis.
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After two years of health crisis, the debt of developing countries increased by 9 points of GDP in 2020, “the strongest annual increase in thirty years”. The World Bank estimates that “more than half of low-income countries are over-indebted”, or about fifteen States. It warns of the need to deal with the problem without delay, so as not to reproduce the errors of the past, including by evoking a “relief” of the burden.
5 billion deferred refunds
To date, the international community has been content to freeze reimbursements for countries that have requested them. In the spring of 2020, the G20 put on the table a “Debt Service Suspension Initiative”. About fifty countries have requested to benefit from it. They were able to freeze their reimbursement until December 2021, keeping nearly 5 billion euros in their coffers.
Three countries have also requested restructuring: Chad, Ethiopia and Zambia. Discussions with creditors are ongoing. They will be able to extend the repayment period and lower the interest. But no question of a cancellation for the moment.
The idea of erasing certain debts, however, seems to be taking hold little by little. Already last October, the Managing Director of the IMF mentioned this possibility. The urgency is all the greater since since January 1, the freeze on reimbursements has ended. All states had to resume payment of their drafts to their creditors.