The World Bank revealed in its most recent report that developing countries’ debts have more than doubled over the last decade, reaching $9 trillion in 2021, emphasizing that the risks of them entering a crisis have increased.
According to the new study, some countries’ debt increased significantly last year, including Egypt, Lebanon, and Turkey.
The portion of a country’s debt borrowed from foreign lenders is referred to as its external debt stock.
Read more: Worry about the mountain of debt too, not just inflation
Egypt’s external debt stocks increased to $143.3 billion in 2020, from $129.8 billion.
The African country has spent a large portion of its borrowed funds on infrastructure. Some analysts believe Egypt has a strong potential to repay its debt.
On the other hand, Lebanon’s debt stood at $66.9 billion, a decrease from $68.9 billion in 2020.
Lebanon is in the grip of a crippling economic crisis. Despite a slight decrease in debt, many entities are hesitant to lend Lebanon money until it implements governance and anti-corruption reforms.
Meanwhile, Turkey’s external debt amounted to $435.5 billion, down from $441.2 billion in 2020.
S&P Global, a New York-based credit rating agency, reported in June that Turkey is vulnerable to a liquidity crisis due to its high debt and economic issues. In Turkey, in particular, extremely high inflation is a problem.
