The World Bank has raised an alarm over the deteriorating financial condition of the world’s 26 poorest nations, stating that these countries are in their worst fiscal shape since 2006. The grim assessment highlights the profound impact of a series of global crises, including the COVID-19 pandemic, inflation, rising interest rates, and the war in Ukraine. These events have placed tremendous pressure on already vulnerable economies, exacerbating debt burdens, and limiting access to financial markets.
Source:- bbc news
According to the World Bank’s report, the sharp increase in debt levels and the subsequent rise in debt servicing costs have significantly reduced fiscal space in these nations. The countries, mostly in sub-Saharan Africa, are now grappling with the twin challenges of rising borrowing costs and shrinking revenues. This financial instability has led to severe cuts in public investment and essential services such as healthcare, education, and infrastructure development.
Source:- news 18
Moreover, the international financial institution has warned that the global economic slowdown, coupled with climate change-induced challenges, is further exacerbating vulnerabilities. The combination of these factors has pushed millions of people into poverty, reversed years of development progress, and heightened the risk of social unrest in these regions.
The World Bank has called for urgent international cooperation to address this mounting crisis, advocating for debt relief, increased financial aid, and enhanced global partnerships to foster sustainable economic growth. The institution is urging wealthy nations and multilateral organizations to step up efforts to provide targeted financial support, improve debt management frameworks, and promote policies that encourage resilient and inclusive economic recovery in these struggling nations.
Without timely intervention, the World Bank warns that these countries may face a prolonged period of economic stagnation, with dire consequences for their citizens’ livelihoods and future development prospects
Share your views in the comments
