World's Poorest Countries Face Rising Debt Crisis Amid Global Challenges

A World Bank report finds the 26 poorest countries are facing unprecedented debt levels and vulnerability to natural disasters. These nations, significantly affected by COVID-19, rely heavily on grants and low-interest loans as market financing declines. The report calls for increased investments and better tax systems.

The world's 26 poorest countries, home to a staggering 40% of the most poverty-stricken population, are grappling with unprecedented debt levels since 2006, compounded by their vulnerability to natural disasters, according to a World Bank report released on Sunday.

The report highlights that these countries are, on average, poorer today compared to the pre-COVID-19 period, while much of the globe resumes its growth trajectory. With the International Development Association (IDA) as a primary financial lifeline, the burden of an 18-year-high debt-to-GDP ratio poses severe threats, the report emphasizes.

The World Bank urged enhanced investments in resilience, simplified tax systems, and efficient public spending to mitigate economic distress, given the nations' reliance on exports and exposure to boom-and-bust cycles.

(With inputs from agencies.)