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Debt in low-income countries represent 88% of GDP – IMF

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The International Monetary Fund (IMF) has stated that total debt in Low-Income Developing Countries (LIDCs) represents 88% of the Gross Domestic Product (GDP) of the countries.

The institution disclosed this in its 2023 Global Debt Monitor report on the state of global debt titled; Global Debt Is Returning to its Rising Trend published recently.  

According to the global financial institution, while global debt fell by 10% about $ 200 billion to now represent 238% of global GDP, for low-income developing increased by 0.5% and now makes up 88% of their GDP.

It stated thus,

The Fund noted that in low-income developing countries, the debt burden has been exacerbated by the exchange rate depreciation and the need to finance the cost-of-living crisis caused by the pandemic and other geopolitical events globally.

The IMF further warned that unless developing countries improve their tax capacity and revenue mobilization capacity, they will find it difficult to manage their debt even with a relatively low debt profile.

It stated thus,

On the state of global debt, the fund noted that global debt presently stands at $235 trillion- a decline of 20% in the last 2years.

However, global debt still constitutes around 92% of global GDP- a decline of 3.6% in the last year.

However, it warned that global debt might be on a rising trend in the medium term. The fund stated thus,

 

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