More countries on the brink of bankruptcy
The World Bank estimates that at least ten more countries could declare insolvency in the coming months.
During the last week there were reports of bankruptcy of Lebanon and Sri Lanka. Mali also failed to repay its bonds on time. Tomasz Ślagórski, vice-president of the Export Credit Insurance Corporation, explains that many of the lowest-income countries had high debt levels even before the war in Ukraine. The armed conflict, on the other hand, has accelerated price increases on the global food market, and this has an additional impact on their budgets.
In his view, there are many factors at work in the world today that increase the likelihood of insolvency. The pandemic has reduced tourism revenues and slowed global economic growth.
Data from the World Bank and the International Monetary Fund show that African countries have the biggest debt problems. These are primarily Mozambique, Zambia, Cape Verde and Angola.
However, the declaration of insolvency by more than a dozen countries in the near future will not have a big impact on the global economy. Nor should it set off a chain reaction.