World Bank: Poorest Countries Face Worst Financial Strain Since 2006

The World Bank reports that 26 of the world’s poorest countries, home to 40% of the most impoverished populations, are experiencing their worst debt crisis since 2006. These nations, with annual per capita incomes under $1,145, now face a debt-to-GDP ratio averaging 72%, the highest in 18 years, and are increasingly vulnerable to natural disasters and economic shocks.

Released ahead of the World Bank and International Monetary Fund meetings, the report highlights that these economies are still poorer than they were before the COVID-19 pandemic, while global recovery has otherwise progressed. The World Bank aims to secure over $100 billion by December 6 to bolster the International Development Association (IDA) fund for these nations, which are now heavily reliant on IDA grants and low-interest loans due to diminished access to market financing.

With many of these countries affected by conflict and social instability, the report urges improvements in tax collection and public spending efficiency to help mitigate these financial challenges and foster resilience.