The World Bank has highlighted that the 26 poorest countries globally are facing a severe debt crisis, compounded by vulnerability to natural disasters and other calamities. These nations, with an annual per capita income of less than $1,145, are now poorer compared to pre-COVID times, despite global recovery efforts.
International aid to these countries has declined significantly, leaving them with limited access to affordable financing. Government debt in these nations has reached a record high of 72% of economic output, the highest in 18 years. The World Bank’s International Development Association (IDA) plays a crucial role in providing grants and low-cost loans to these vulnerable economies.
Most of the low-income countries under scrutiny are in Africa, along with Afghanistan, Syria, Yemen, and North Korea. These nations face higher risks from natural disasters, with annual losses averaging 2% of economic output, five times higher than low-middle-income countries. Additionally, the costs of adapting to climate change are disproportionately high for low-income economies.