ISLAMABAD: The United Nations trade and development body has warned of short-term public debt servicing needs as a growing concern in the wake of Ukraine war and monetary tightening. Developing countries are projected to require $310 billion to meet external public debt service requirements in 2022, according to UN Conference on Trade and Development (Unctad).
Pakistan, Mongolia, Sri Lanka, Egypt and Angola are the countries which appear vulnerable to a sudden stop due to a combination of large rollover pressures and a large debt service to export ratio. Pakistan, Egypt and Angola already have long-term International Monetary Fund programmes in place, Unctad said in its update to the Trade and Development Report 2021.
Public sector external debt vulnerabilities are substantial, especially in low-income countries. Public and publicly guaranteed (PPG) external debts in developing countries represented 64.4 per cent of the total stock of external debt in 2020.
The update, released on March 24, has downgraded its global economic growth projection for 2022 to 2.6pc from 3.6pc due to the Ukraine war and to changes in macroeconomic policies made by countries in recent months. While Russia will experience a deep recession this year, significant slowdowns in growth are expected in parts of Western Europe and Central, South, and South-East Asia.
Published in Dawn, March 27th, 2022