Broad, fast action to save lives and help countries rebuild

Axel van Trotsenburg|

The COVID-19 pandemic is uncharted territory for every country in the world. It has unleashed both a global health emergency and an unprecedented economic crisis of historic magnitude. Even as the coronavirus continues to spread, the World Bank estimates that, between 2019 and 2020, the global economy will shrink by $4.2 trillion dollars.  That is substantially bigger than South Asia’s entire regional economy (which is about $3.5 trillion), and as if we somehow wiped both Germany and Belgium off the economic map. Worse still, the fall from where we expected to be in 2021 if COVID-19 hadn’t hit is closer to $7.5 trillion dollars—equivalent to 40% of the entire U.S. economy, as well as larger than the combined GDP of Latin America and the Caribbean plus the Middle East and North Africa.

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Debt Report 2020 Edition I

For the first time, the Debt team at the World Bank Development Economics Data Group image(DECDG) will publish online a new series of Debt Reports, at regular intervals, over the course of the year. Their aim is to provide users with analyses of evolving trends and development related to external debt and public debt in individual countries and regional groups, with primary emphasis on low- and middle-income countries, and to keep users abreast of debt-related issues and initiatives.

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To balance debt and development, transparency and purpose are key

Unsustainable debt. Debt distress. Debt trap. These dire terms are once again back in theindex headlines, just a decade after the global financial crisis of 2008-2009.

In the past five years alone, public debt in the poorest countries has increased from 36 percent of GDP to 51 percent of GDP.  In addition, debt-service ratios in some countries are rising at an alarming pace, threatening countries’ ability to invest in much-needed infrastructure, education, health and many other needs crucial for lifting their citizens out of poverty and achieving the international community’s Sustainable Development Goals by their 2030 deadline.

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