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Global public debt rises to $97 trillion on surge in EM borrowings
Last year, public debt in developing countries reached $29 trillion, accounting for 30% of the global total, a substantial increase from a 16% share in 2010
Global public debt reached a record high of $97 trillion in 2023, driven by cascading crises as well as the sluggish and uneven performance of the global economy, a UN report said.
The UN Trade and Development’s (UNCTAD) ‘World of Debt Report 2024’ showed a $5.6 trillion increase in public debt from 2022.
The report highlighted an alarming trend in developing countries where governments spend more on interest than development.
In 2023, public debt in developing countries reached $29 trillion, accounting for 30% of the global total, a substantial increase from a 16% share in 2010, the report noted.
Over three-quarters of this debt is owed by countries in Asia and Oceania, while Latin America and the Caribbean account for 17% and Africa for just 7%.
India in 2023 owed $2.9 trillion, while China had a debt of $14.77 trillion.
Developing countries also pay a higher interest rate as compared to developed economies.
Developing regions borrow at rates that are 2 to 4 times higher than those of the US and 6 to 12 times higher than those of Germany, the report found.
High borrowing costs increase the resources needed to pay creditors, which makes it difficult for developing countries to finance investments, the report said.
Although public debt is growing in all regions, only in Africa it is growing faster than GDP.
The increase in interest rates by central banks worldwide since 2022 is having a direct impact on public budgets in developing countries.
Net interest payments on public debt reached$847 billion in 2023, a 26% increase compared to 2021.
A growing number of countries spend more on interest than development. A number of developing countries spend more public resources on interest than on education or health.
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