Developing world may need to find $2.5 trn over 5 yrs to meet debt costs

A greater proportion of poorer-country debt is now owed to commercial lenders, which offer shorter maturities, and capital markets have largely closed to many governments

Developing nations may need to find as much as $2.5 trillion over five years to meet external debt-service costs as interest rates rise and poorer countries struggle to refinance borrowings, a Finance for Development Lab model shows. 

The findings published by the Bill & Melinda Gates Foundation-backed and Paris-based think tank assume interest rates climbing by 400 basis points from levels in 2019 and a 10% decline in currencies against the dollar. It assessed conditions in 113 countries, with China and Russia among nations excluded because data weren’t available.

“Current costs of funding make debt service hard to sustain, with an expected