WASHINGTON: Developing countries spent nearly half a trillion dollars to service their external public and publicly guaranteed debt in 2022, draining funds from critical health, education and climate needs, and putting the poorest countries at increasing risk of “tumbling into a debt crisis,” the World Bank said on Wednesday.
In its latest International Debt Report, the bank said the debt-service payments — including principal and interest — rose 5 percent to a record $443.5 billion from a year earlier amid the biggest surge in global interest rates in four decades. It said the payments could shoot 10 percent higher in 2023-2024.
The 75 poorest countries were hardest hit, said the report, now in its 50th year. Their external public debt service payments reached a record $88.9 billion in 2022 and would surge by 40 percent over the 2023-2024 period. Their interest payments alone had quadrupled since 2012 to $23.6 billion, it said.
“This is the decade of reckoning,” World Bank chief economist Indermit Gill told Reuters in an interview. “Record debt levels and high interest rates have set many countries on a path to crisis,” he said, warning that continued high interest rates would push more developing countries into debt distress.
Gill said he was paying close attention to Ethiopia’s discussions with bondholders after a breakdown in talks over how long to extend the maturity and spread out repayments of its single $1 billion international bond maturing in December 2024.
“Ethiopia is like a canary in the coal mine,” he said. “It’s the biggest country that would default. That’s an important one. It’s one of the five biggest economies in sub-Saharan Africa.”
Ethiopia is careening toward default after it said last week it could not pay a $33 million bond coupon due on Monday.
Gill told reporters that steep debt servicing costs, high debt burdens and slowing growth in many countries raised concerns about a new debt crisis and the risk of contagion, but said he does not view that risk as “imminent.”
He said the situation would remain difficult for developing countries, with past experience indicating that interest rates were unlikely to come down “anytime soon” especially since supply shocks could jack up inflation again quickly.
Gill called for “quick and coordinated action” by debtor countries, private and official creditors, and multilateral financial institutions to improve transparency, develop better debt sustainability tools, and speed up debt restructurings.
African countries faced “another lost decade,” Gill told Reuters, noting they had seen no per capita income growth since 2014 on average.
The report said one in every four developing countries was now priced out of international capital markets and there had been 18 sovereign debt defaults in 10 countries over the past three years, more than in the past two decades combined.
Debt service payments consumed an ever-larger share of export revenues, with some countries now “just one shock away from a debt crisis,” Gill wrote in the report, noting that about 60 percent of low-income countries are already in or at risk of debt distress.
Domestic debt levels were also high in countries like Argentina and Pakistan, increasing risks. Countries that deferred making principal and interest payments under the Group of 20’s Debt Service Suspension Initiative (DSSI) adopted during the COVID pandemic also faced additional costs now that those payments were due, the bank said, although exact data won’t be reported until 2024.
The report noted private capital had largely withdrawn from developing countries, favoring higher interest rates in advanced economies. Private creditors received $185 million more in principal repayments than they disbursed in loans, the first time that was seen since 2015.
Overall, there was a net outflow of $127.1 billion from low- and middle-income countries to bondholders, compared to an average inflow of $202 billion from 2019-2021.
The World Bank and other multilateral creditors, helped fill the gap, providing a record $115 billion in new financing for developing countries in 2022, the report said.
Pakistan, other developing countries, spent record $443.5 bln to service public debts in 2022 — World Bank
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Pakistan, other developing countries, spent record $443.5 bln to service public debts in 2022 — World Bank
- Servicing external debts drains funds from critical health, education and climate needs, says World Bank report
- Continued high interest rates would push more developing countries into debt distress, says World Bank’s chief economist
Pakistan records $38.3 billion in remittances in FY25, with spike surpassing IMF loan package
- Remittances rose by around $8 billion from FY24’s $30.25 billion, marking a sharp 27 percent increase
- Saudi Arabia topped FY25 remittance sources with $9.34 billion, followed by UAE with $7.83 billion
KARACHI: Pakistan received a record $38.3 billion in workers’ remittances during the last fiscal year, reporting an increase of about $8 billion over a 12-month period that exceeds the country’s ongoing International Monetary Fund (IMF) loan program, according to official data and analysts on Tuesday.
The remittance surge from $30.25 billion in FY24 helped shore up the country’s foreign reserves, prompting experts to says it is likely to push the current account into surplus for the first time in over a decade.
The IMF Executive Board approved a $7 billion Extended Fund Facility (EFF) for Pakistan in April 2024, spanning 37 months, after acknowledging Islamabad’s structural reforms and stabilizing macroeconomic indicators.
The government described the bailout as critical to reviving an economy that had faced a prolonged financial crisis and balance-of-payments stress over the past two years.
“Remittances have actually rescued Pakistan beyond expectations. It was a significant jump of over $8 billion in annual remittances, which is more than the whole IMF program funding,” Shankar Talreja, head of research at Topline Securities Limited, told Arab News after the central bank released remittance figures for the last fiscal year.
“Thanks to the remittances, we will be able to record a current account surplus for the first time after 13 years of deficit and for only the second time in the last two decades,” he added.
According to the State Bank of Pakistan, Saudi Arabia led all contributors during FY25, with remittances totaling $9.34 billion, followed by the United Arab Emirates at $7.83 billion, the United Kingdom at $5.99 billion and the United States at $3.72 billion.
Remittances from Gulf Cooperation Council (GCC) countries excluding Saudi Arabia and the UAE totaled $3.71 billion, while EU countries contributed $3.53 billion.
Commenting on the data, Mohammed Sohail, CEO of Topline Securities, wrote on social media: “Record Remittances When Most Needed. In a year marked by economic challenges, overseas workers stepped up: Pakistan received a record USD 38.3 billion in remittances in FY25 — up 27 percent.”
The fiscal year average stood at approximately $3.19 billion per month, well above the average of $2.52 billion in FY24.
Pakistan to launch targeted polio vaccination drive in northern districts next week
- More than 158,000 children to be immunized in four high-risk areas from July 14 to 18
- Surge in cases raises alarm as Pakistan remains one of two countries where polio is still endemic
KARACHI: Pakistan will launch a targeted five-day polio vaccination campaign next week, aiming to immunize more than 158,000 children in high-risk districts of the northern Gilgit-Baltistan region and northwestern Khyber Pakhtunkhwa province, health authorities said on Wednesday.
The campaign will be conducted exclusively in the Diamer district of Gilgit-Baltistan and the Upper Kohistan, Lower Kohistan, and Kolai-Palas districts of Khyber Pakhtunkhwa, according to the National Emergency Operations Center (NEOC), which oversees Pakistan’s polio eradication efforts.
“Special focus and effective strategies are being applied in high-risk union councils,” the NEOC said in a statement, referring to administrative units where access and vaccine acceptance remain challenging.
The drive will take place from July 14 to 18.
Polio is a highly infectious viral disease that primarily affects young children and can cause permanent paralysis. There is no cure, but it can be prevented through multiple doses of the oral polio vaccine and a complete routine immunization schedule, experts say.
Pakistan, one of only two countries in the world where polio remains endemic, the other being neighboring Afghanistan, has made significant gains in recent decades. Annual cases have fallen dramatically from an estimated 20,000 in the early 1990s to single digits by 2018.
However, the country has witnessed a worrying resurgence recently. As of July 2025, Pakistan has reported 14 polio cases, including eight in Khyber Pakhtunkhwa, four in Sindh, and one each in Punjab and Gilgit-Baltistan, according to official data. The country reported 74 cases in 2024, raising alarms among health officials and global partners supporting the eradication campaign.
In contrast, only six cases were recorded in 2023 and just one in 2021.
The latest targeted drive follows smaller vaccination efforts in high-risk areas. A special campaign was conducted last month in six union councils of Khyber Pakhtunkhwa’s Bannu district, where approximately 17,500 children were vaccinated. A similar operation is planned for 11 union councils in North Waziristan, another district with a history of polio transmission.
The government conducted three nationwide polio campaigns earlier this year, in February, April, and May, aiming to reach around 45 million children with the help of over 400,000 frontline workers, including 225,000 women vaccinators.
Despite decades of effort, Pakistan’s eradication drive has faced persistent challenges, including misinformation about vaccines and resistance from conservative religious and militant groups who view immunization campaigns with suspicion. Some clerics have claimed the vaccines are a Western conspiracy to sterilize Muslim children or part of intelligence operations.
Vaccination teams and police providing security have also been targeted in militant attacks, particularly in remote and conflict-affected areas of Khyber Pakhtunkhwa and Balochistan. These threats have at times forced the suspension of campaigns and restricted access to vulnerable populations.
Pakistan launched its national polio eradication program in 1994.
Pakistan, Russia discuss steel mills revival, industrial cooperation at INNOPROM forum
ISLAMABAD: Russia and Pakistan discussed plans to modernize a major steel complex and expand industrial cooperation during a high-level meeting on the sidelines of the INNOPROM Annual Industrial Forum in Yekaterinburg, state media reported on Tuesday.
The meeting between Haroon Akhtar Khan, Special Assistant to the Pakistani Prime Minister on Industries and Production, and Russian Trade and Industry Minister Anton Alikhanov focused on reviving Pakistan’s dormant steel industry and enhancing bilateral trade.
INNOPROM is Russia’s largest annual industrial trade fair, bringing together government delegations, business leaders and technology firms from over 30 countries to explore partnerships in manufacturing, engineering and high-tech industries.
“Both sides reviewed technical aspects of modernizing the Pakistan Steel Mills to establish a cutting-edge metallurgical facility,” Pakistan Television (PTV) reported. “The discussions also explored ways to enhance trade ties and promote industrial collaboration between the two countries.”
Earlier this month, Russian Consul-General Andrey B. Fedorov told Arab News Moscow expected to finalize an agreement with Islamabad this summer to construct a new steel mill in Karachi.
The original Pakistan Steel Mills, once the country’s flagship industrial complex, was built in the 1970s with Soviet assistance. While it symbolized national self-sufficiency, the mill has been non-operational since 2015 due to years of financial mismanagement, political interference and mounting losses.
Technical experts from Russia have already inspected the proposed site for the new facility, and another delegation is expected soon to draft a detailed roadmap.
Russia has a long history of industrial cooperation with Pakistan, having previously built key infrastructure projects such as the Guddu Power Station in Sindh in the 1980s, one of the country’s major electricity producers.
Moscow and Islamabad have expanded cooperation in recent years despite global tensions over the war in Ukraine.
US reaffirms Trump’s role in India-Pakistan ceasefire, contradicting New Delhi’s denials
- Tammy Bruce says people today can see events unfold for themselves and don’t need official statements to know what really happened
- New Delhi has denied any US role in the ceasefire with Pakistan, while Islamabad has acknowledged and praised American involvement
ISLAMABAD: A US State Department official reaffirmed on Tuesday President Donald Trump and his top administration officials were involved in negotiations that led to a ceasefire between India and Pakistan earlier this year, contradicting repeated statements from Indian officials denying any American role.
Speaking at a State Department media briefing in Washington, spokesperson Tammy Bruce responded to a question about New Delhi’s rejection of Trump’s involvement in the truce.
Indian Prime Minister Narendra Modi and members of his cabinet have insisted that the ceasefire was achieved bilaterally, without third-party mediation.
“So many comments speak for themselves,” she said. “That’s one of the good-news aspects of our modern world — people can see what’s really occurring. You’re not reliant on a comment to know what has really happened.”
She maintained “Secretary [of State] Marco Rubio ... the Vice President of the United States [JD Vance were] also involved in the negotiations with Pakistan and India,” which was announced by President Donald Trump on May 10.
Bruce’s comments came amid continued tension between Indian and American narratives about the circumstances that led to the ceasefire after four days of intense military conflict between the two South Asian nuclear rivals.
The Trump administration announced the two countries had agreed to halt hostilities and engage in talks at a neutral venue.
While the Trump administration publicly claimed credit for defusing the crisis, New Delhi maintained silence initially. In recent weeks, however, Indian officials have pushed back against suggestions of US mediation.
Suggestions of foreign involvement in Indian foreign policy engagements in the region, particularly with Pakistan, are often politically sensitive.
The Ministry of External Affairs in New Delhi announced in a statement after last month’s G7 meeting in Canada that Modi had challenged the American perspective, saying there was no US mediation in the Pakistan truce.
Subsequently, India’s Foreign Minister Subrahmanyam Jaishankar made similar remarks to clarify India’s position on the issue.
Pakistan, in contrast, has openly acknowledged and praised US involvement, with the government even nominating Trump for a Nobel Peace Prize following the ceasefire announcement.
Punjab braces for more rain as monsoon spell expected to continue until July 13
- Provincial Disaster Management Authority advises citizens to avoid swimming in rivers, canals and streams
- It asks people to stay in safe areas as intense rainfall is expected in several regions during the next 24 hours
ISLAMABAD: The ongoing spell of monsoon rains is expected to continue across most districts of Pakistan’s Punjab province until July 13, the Provincial Disaster Management Authority (PDMA) said on Wednesday, urging residents to take precautionary measures amid forecasts of intense downpours in the next 24 hours.
In the last 24 hours, significant rainfall was recorded in several cities, including Khanewal (51mm), Rawalpindi (42mm), Sahiwal (44mm) and Murree (41mm), according to the PDMA spokesperson. Lahore received 23mm of rain, while Okara recorded 30mm, Mandi Bahauddin 27mm, Mangla 24mm and Toba Tek Singh 13mm.
“The monsoon spell is likely to persist across the province until July 13,” said Irfan Ali Kathia, Director General of Punjab PDMA, in a statement.
“Severe rainfall is expected in several regions during the next 24 hours,” he added.
Kathia advised citizens to avoid swimming in rivers, canals and streams, warning that Punjab’s government has imposed Section 144 to restrict public access to water bodies due to the risk of flooding and drowning.
“People should stay in safe areas during thunderstorms and avoid taking shelter in mud houses or dilapidated buildings,” he said. “Drivers are urged to reduce speed during rainfall and maintain safe distances to avoid accidents.”
