Many countries are being squeezed by increasing interest payments and high debt redemptions. The economic scarring of the pandemic, conflicts around the world, and the abrupt rise in global interest rates have hit low-income countries the hardest. The median low-income country is spending over twice as much on debt service to foreign creditors as a share of revenue than it did 10 years ago—roughly 14 percent at the end of 2023 from 6 percent 10 years earlier. Following years of substantial borrowing, debt redemptions in low-income countries over the near term are almost triple their long-term average: about $60 billion compared to an annual average of $20 billion from 2010 to 2020.
Improved creditor…
