UNDP warns 'ballooning' debt repayments in poor countries are reaching alarming levels

Indicators of countries’ debt fragility are running alarmingly high and getting worse, according to new analysis by the United Nations Development Programme (UNDP) released ahead of the G20 Finance Ministers and Central Bank Governors meeting in Cape Town, South Africa.

Currently, interest payments exceed 10 percent of government revenues in 56 developing countries, twice the level of 10 years ago. Of these countries, 17 spend 20 percent of their revenues on interest payments.

The total external public debt of the 31 poorest countries with debt problems or at high risk is estimated at $205 billion.

According to UNDP data, the total external debt of developing economies will reach a record $1.4 trillion in 2023. The poorest countries were the most affected by the debt, which increased by $36 billion in total due to the tripled debt costs and quadrupled interest payments in the last 10 years.

“The debt-development imbalance threatens a lost decade of development progress for many of the world’s poorest countries. The international community should not wait until the last minute to provide tangible financial lifelines. A new debt relief initiative is financially and politically necessary. Platforms like the G20 have an important role to play in shaping long-term financing solutions that foster sustainable growth opportunities,” said UNDP Executive Director Achim Steiner.