The record number of developing nations at risk of a debt crisis will be high on the agenda next week when central bankers, finance ministers & political leaders convene for the World Bank Group & International Monetary Fund (IMF) spring meetings.
Ballooning inflation, escalating borrowing costs & a strong dollar have made repaying loans & raising money significantly more expensive for dozens of developing nations, pushing several into default last year.
Here’s a look at countries that face a debt crunch or have already defaulted on international loans.
Egypt's tourism-dependent economy was hammered by the one-two punch of COVID-19 & soaring food & energy prices, leaving it short of dollars & struggling to pay rising debts. Inflation stands now at a more than 5-year high above 30%.
EGYPT
The Central American country has roughly $6.4 billion in outstanding Eurobonds. While the next payment is not due until 2025, concerns about El Salvador's high debt service costs & its financing plans & fiscal policies have pressed its bonds into deeply distressed territory.
EL SALVADOR
Ghana is in its worst economic crisis in a generation, spending over 40% of government revenues on debt payments last year. It secured a $3 billion agreement with the IMF in December, though it still needs to get financing assurances from bilateral lenders to clinch the final sign-off.
GHANA
Lebanon's financial system began unravelling in 2019 after decades of mismanagement & corruption, & in early 2020 it defaulted. It reached a provisional $3 billion IMF agreement in April 2022, but the fund recently warned the country was "in a very dangerous situation" due to delays on a range of reforms, including banking & exchange rate overhauls.
LEBANON
Malawi is grappling with foreign exchange shortages & a budget deficit of some 1.32 trillion kwacha ($1.30 billion), or 8.7% of GDP.
MALAWI
Months of political & economic turmoil, worsened by crippling floods last year & record inflation, put Pakistan in the danger zone.
PAKISTAN
The tourism-dependent North African economy is in the throes of a punishing crisis that led to a shortage of basic food items. Most debt is internal but foreign loan repayments are due later this year. Credit ratings agencies have said Tunisia may default.
TUNISIA
Sri Lanka defaulted on its international debt last year after economic mismanagement, exacerbated by the COVID-19 pandemic, sparked a political crisis & left it without dollars for even essential imports.
SRI LANKA
The IMF estimates Ukraine needs $3-$4 billion a month to keep the country running. Rebuilding Ukraine's economy is now expected to cost $411 billion, a recent report by the World Bank and others found.
UKRAINE
The first African country to default during the COVID-19 era in 2020, Zambia is seen as a litmus test for the G20's Common Framework initiative set up during the pandemic to streamline debt restructurings. But talks have been remarkably slow, & external debt crept up to $18.6 billion.
ZAMBIA