2wt does it mean to you that the human race owes 300 Trillion Dollars Debt distress is when a country is unable to fulfil its financial obligations, such as repayments due on its debt. The IMF and World Bank believe 60% of low-income countries are at or near this point.
At a time when the war in Ukraine is disrupting food supplies and pushing food prices higher, countries that “strain to pay their creditors will also struggle to help their poorest citizens”, Al Jazeera reports.
As food and fuel prices soar, governments may need to give more grants to households in need to help them cover costs, particularly in low-income countries, the IMF says.
In 2021, the countries with the highest global debt levels compared to GDP were Japan (257%), Sudan (210%), Greece (207%), Eritrea (175%) and Cape Verde (161%), according to data published by Visual Capitalist.
Rising prices mean inflation is spiking, so central banks are increasing interest rates to try and contain this. Rising interest rates in turn mean higher loan repayments.
The most highly indebted governments, households and firms will be hardest hit by significant interest rate rises, so countries have to be careful to strike the “right balance”, the IMF warns.