IDS is an annual publication of the World Bank featuring external debt statistics and analysis for the 122 low-and middle-income countries that report to the World Bank Debt Reporting System (DRS).
The 2021 report highlights an urgent need for creditors and borrowers alike to collaborate to stave off the growing risk of sovereign-debt crises triggered by the covid-19 pandemic.
"The pace of debt accumulation for these countries was nearly twice the rate of other low- and middle-income countries in 2019," said Worl Bank in a press release on Monday.
Before the onset of the covid-19 pandemic, rising public debt levels were already a cause for concern, particularly in many of the world’s poorest countries as discussed in our Four Waves of Debt report published in December 2019.
Responding to a call from the World Bank and the International Monetary Fund (IMF), the G20 endorsed the Debt Service Suspension Initiative (DSSI) in April 2020 to help up to 73 of the poorest countries manage the impact of the covid-19 pandemic.
The debt stock of DSSI-eligible countries to official bilateral creditors, composed by mostly G-20 countries, reached $178 billion in 2019 and accounted for 17 percent of long-term net debt flows to low- and middle-income countries.
Within the G-20 creditor group there have been some important shifts characterized by a marked increase in lending by G-20 member countries that are themselves middle-income countries.
For example, China, by far the largest creditor, has seen its share of the combined debt owed to G-20 countries rise from 45 percent in 2013 to 63 percent at end-2019.
Over the same period the share for Japan, the second largest G-20 creditor, has remained broadly the same at 15 percent.
The 2021 IDS data release also reflects progress made to increase coverage of complex debt instruments, given their rising prominence in the debt profiles of developing countries.
The central bank and currency swap arrangements that represent loans from other central banks also occur in low-and middle-income countries.
Increased debt transparency will help many low-and middle-income countries assess and manage their external debt through the current crisis and work with policymakers toward sustainable debt levels and terms.