Emerging economies will be increasingly burdened by the global public debt, following the global health crisis that has doubled borrowing rates.
In a report on the global economic reality, the French newspaper "lesechos" says that the leniency in issuing bonds and increasing public debt will be burdensome for developing countries, in contrast to developed countries that benefited from low interest rates.
According to Fitch Ratings 'statistics, in 2022 the total interest of developing countries' loans will amount to the value of rich countries ’loans themselves, which is approximately $ 860 billion, despite the fact that the total of what they borrowed amounts to a third of the value of rich countries’ loans only.
In light of these increasing burdens on emerging economies, the newspaper believes that observers and decision-makers at the global level must find solutions and not put all countries in the same mold, and experts believe that it is necessary to face this growing disparity in the global public debt burden to find more sustainable solutions.
The Corona virus has caused an increase in the value of government debts by 10 trillion dollars in 2020, according to Fitch estimates, to reach about 77.8 trillion dollars, equivalent to 94% of global GDP, and it took 7 years to increase The global debt ratio at this rate.
Estimates also show that the average public debt in developing countries is 60% of GDP, which is almost the same as in developed countries.
However, this convergence in numbers should not hide the growing disparity in terms of the burden that loans place on both developing and developed countries, as the average interest rates on loans granted to developing countries increased from 4.3% to 5.1% between 2010 and 2020, while it decreased. 4% to 2% for rich countries.