Commodity prices, interest rates can exacerbate poor country debt: Malpas

Cairo — Fluctuations in commodity prices and rising interest rates could worsen the debt situation in poor countries, World Bank Governor David Malpass said Thursday, step by step to maintain investor confidence. He urged countries to start fiscal consolidation.

In a speech from Sudanese capital Khartoum prior to the World Bank and the International Monetary Fund’s annual meeting, Malpas said that as of mid-2021, more than half of the world’s poorest countries were “in distress of external debt.” , At risk. ” Mid-October.

“If debt suspension or the DSSI initiative expires later this year, low-income countries that resume debt repayment payments will have less financial space,” Malpas said, buying vaccines and funding other priorities. He said he would limit the ability to provide.

Malpas reiterated his call for accelerated cooperation to implement the G20 debt restructuring framework for poor countries, including the private sector, which previously failed to extend tolerance to sovereign borrowers.

“It’s time to pursue gradual, people-centric fiscal consolidation and rebuild unsustainable debt,” Malpas said, adding that countries should.

At the same time, countries need to seek a reprofile of debt repayment while international interest rates remain low, eliminating wasteful spending.

Malpas also called for increased scale of development efforts to help the economy rebuild from the COVID-19 pandemic.

“To be influential, we need an education, nutrition and vaccination program that reaches hundreds of millions of children. We need a digital cash transfer program that can provide the resources needed to billions of people in the next crisis. That’s what Malpass said.

Malpas, who met with Sudan’s Prime Minister Abdullah Hamdok earlier, said Sudan is making progress by reconnecting with the global economy, but it requires patience as the country is tackling shortages and trying to attract investment. Stated.