Twenty-six of the world’s poorest countries, home to 40 percent of the poorest people, are more indebted than at any time since 2006 and are increasingly vulnerable to natural disasters and other shocks, a new World Bank report showed.
The report finds that these economies are on average poorer today than they were before the COVID-19 pandemic, even as the rest of the world has largely recovered from COVID and resumed its growth trajectory.
Released a week before the start of the World Bank and International Monetary Fund annual meetings in Washington, the report confirms a major setback in efforts to eradicate extreme poverty and underscores the World Bank’s efforts this year to raise $100 billion to top up its fund to finance the world’s poorest countries.
The 26 poorest economies studied, which have an annual per capita income of less than $1,145, have increasingly relied on grants and loans at near-zero interest rates as market financing has largely ceased, the World Bank said.
Their average debt-to-GDP ratio of 72 percent is at an 18-year high, and half the group is either in debt or at high risk of it.
Most of the countries in the study are in sub-Saharan Africa, from Ethiopia to Chad and Congo, but Afghanistan and Yemen are also on the list.
Two-thirds of the 26 poorest countries are either in armed conflict or struggling to maintain order due to institutional and social fragility, which holds back foreign investment and almost all exports, subjecting them to frequent boom-and-bust cycles, the report said.
