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 PM hails negative SPI inflation, says economic indicators improving
- SPI focuses on short-term price movements that affect low- and middle-income households most directly
- Shehbaz Sharif says the government wants to pass on the benefits of improving economy to the public
ISLAMABAD: Prime Minister Shehbaz Sharif on Friday expressed satisfaction over the annual decline in Pakistan’s Sensitive Price Index (SPI), which he said had fallen to -3.52% in April 2025, compared to 26.94% in the same month last year.
The SPI measures weekly changes in the prices of essential items such as food, fuel and utilities across various consumption groups. Unlike the broader Consumer Price Index (CPI), which captures overall inflation, the SPI focuses on short-term price movements that affect low- and middle-income households most directly.
“The [SPI] rate stood at 26.94% in the same month last year, whereas in April 2025, it has been recorded at minus 3.52%,” the prime minister said in a statement issued by his office.
“The country’s economic indicators are improving with each passing day,” he added. “The government is making every effort to ensure that the benefits of these improving economic indicators reach the public.”
Sharif also commended his economic team for their efforts in stabilizing the economy and curbing inflation.
In May 2023, Pakistan experienced its highest recorded inflation, with the CPI reaching 38% year-on-year, driven by surging food and energy prices.
The recent decline in the SPI indicates potential relief for consumers, though the government continues to face challenges in managing the economy, including meeting fiscal targets and securing external financing.
VISA to triple Pakistan office size, partner with 1-Link, PayPak — finance minister
- Muhammad Aurangzeb hails company’s role in advancing digital payments and financial inclusion
- The finance minister also assures the US financial services company of the government’s full support
ISLAMABAD: Finance Minister Muhammad Aurangzeb said on Thursday US financial services company Visa will triple the size of its office in Pakistan and collaborate with the country’s first-ever domestic payment card scheme, 1Link and PayPak.
Visa Inc. is a global payments technology company that operates one of the world’s largest electronic payment networks, enabling consumers and businesses to make payments using Visa-branded credit, debit and prepaid cards.
Visa doesn’t issue cards itself but partners with banks and financial institutions to do so. 1Link and PayPak is similar in concept to Visa or Mastercard but is designed specifically for local use within Pakistan.
The Pakistani minister, currently in Washington, appreciated Visa’s role in the digitalization of his country’s economy during a meeting with the company’s regional vice president, Andrew Torre.
“He [Aurangzeb] noted that Visa’s decision to triple the size of its office in Pakistan and its collaboration with 1Link and PayPak would contribute significantly to promoting financial inclusion, e-commerce, transaction security, and payment gateways in Pakistan, as well as facilitate remittances,” the finance ministry said in a statement issued after the meeting.
It added the finance minister also assured the company of the government’s full support in resolving any issues faced by them.
Aurangzeb’s meeting with Torre came as the country works toward a more inclusive and digitally empowered economy, with government backing and private sector innovation aligned.
Pakistan Senate rejects Indian attempt to link it to Kashmir tourist attack
- Deputy PM Ishaq Dar says India must be held accountable for its acts of ‘terrorism’ in Pakistan
- He also reaffirms Pakistan’s ‘moral, political and diplomatic’ support to the people of Kashmir
ISLAMABAD: Pakistan’s Senate on Friday unanimously passed a resolution condemning what it called India’s “frivolous and baseless” attempts to link Islamabad to a deadly shooting in the disputed Himalayan region of Kashmir, rejecting the allegation and accusing New Delhi of using “terrorism” as a political tool.
India has blamed Pakistan for the attack in the scenic town of Pahalgam in Kashmir’s Anantnag district, where gunmen killed 26 civilians on Tuesday in the deadliest assault on non-combatants in nearly two decades.
Pakistan has denied any involvement in the incident, with Deputy Prime Minister Ishaq Dar reading out the resolution in the upper house of parliament that was later adopted by all the lawmakers.
“The Senate of Pakistan condemns terrorism in all its forms and manifestation, emphasizes that killing of innocent civilians is contrary to the values upheld by Pakistan [and] rejects all frivolous and baseless attempts to link Pakistan with the Pahalgam attack of 22nd April 2025 in Indian Illegally Occupied Jammu and Kashmir,” he said.
The resolution denounced India’s suspension of the decades-old Indus Waters Treaty and reaffirmed Pakistan’s support for the Kashmiri people’s right to self-determination.
It also accused India of waging a “mala fide campaign” to malign Pakistan.
“The country’s sovereignty, security and interests demand that India should be held accountable for its involvement in different acts of terrorism and targeted assassinations on the soil of other countries, including Pakistan,” Dar continued.
He also reaffirmed Pakistan’s “unwavering moral, political and diplomatic support for and commitment to the Kashmiri people’s just struggle for realization of their inalienable right to self determination.”
Detained Pakistan rights activist Dr. Mahrang Baloch launches hunger strike
- Baloch, 32, was arrested last month on charges of terrorism, sedition and murder
- Dozen UN experts called on Pakistan in March to immediately release Baloch rights defenders
QUETTA: Detained activist Dr. Mahrang Baloch, one of the leading campaigners for Pakistan’s Baloch minority, has launched a hunger strike along with other detainees, her sister told AFP on Friday.
Mahrang Baloch, 32, was arrested last month on charges of terrorism, sedition and murder.
In her native Balochistan, an impoverished province that borders Afghanistan and Iran, security forces are battling a growing insurgency.
Rights groups say the violence has been countered with a severe crackdown that has swept up innocent people. Authorities deny heavyhandedness.
Mahrang’s hunger strike “is aimed at denouncing the misconduct of the police and the failure of the justice system to protect... prisoners,” her younger sister, Nadia Baloch, said.
Nadia said the hunger strike was launched on Thursday after the attempted “abduction” of one of the Baloch detainees.
Mahrang’s organization, the Baloch Yakjehti Committee (BYC), said the inmate was beaten by security officials and taken from the prison to an unknown location.
A security official said the detainee was moved to another prison and denied any mistreatment.
BYC said four other detained Baloch activists have joined the hunger strike.
“All of them are peaceful political workers, imprisoned for raising their voices... Their only ‘crime’ is organizing peacefully in an environment saturated with state terror and violence,” the group said.
Activists say in the crackdown against militancy in the region authorities have harassed and carried out extrajudicial killings of Baloch civilians.
Pakistani authorities reject the “baseless allegations.”
A dozen UN experts called on Pakistan in March to immediately release Baloch rights defenders, including Mahrang, and to end the repression of their peaceful protests.
UN special rapporteur for human rights defenders Mary Lawlor said she was “disturbed by reports of further mistreatment in prison.”
The judiciary has declined to rule on Mahrang’s detention, effectively halting any appeal and placing the matter solely in the hands of the provincial government.
Insurgents in Balochistan accuse outsiders of plundering the province’s rich natural resources and launched a dramatic train siege in March, during which officials said about 60 people were killed.
Pakistan joins Muslim world in sending condolences ahead of Pope’s funeral on Saturday
- Over 128,000 people have already paid last respects to Francis, whose coffin will be closed at 1800 GMT in ceremony attended by senior cardinals
- Francis will be interred in the ground, his simple tomb marked with just one word: Franciscus, people will be able to visit the tomb from Sunday morning
ISLAMABAD: Pakistan joined the Muslim world in sending condolences as the Vatican made final preparations Friday for Pope Francis’s funeral and the last of the huge crowds of mourners filed through St. Peter’s Basilica to view his open coffin.
Over 128,000 people have already paid their last respects to Francis, whose coffin will be closed at 8:00pm (1800 GMT) in a ceremony attended by senior cardinals.
Many of the 50 heads of state and 10 monarchs attending Saturday’s ceremony in St. Peter’s Square, including US President Donald Trump and Ukrainian leader Volodymyr Zelensky, are expected to arrive later Friday in Rome.
“Pakistan conveys its heartfelt condolences on the passing of His Holiness, Pope Francis, a revered spiritual figure and a worldwide advocate for peace, interfaith dialogue and compassion,” the foreign office said.
“His Holiness demonstrated unwavering commitment to fostering unity among world religions, advocating for the oppressed and promoting the inherent dignity of all humankind. Pakistan deeply values his tireless efforts to enhance mutual respect and understanding among diverse cultures and faiths.”
The foreign office said the pope’s legacy was marked by “profound humility, selfless service and a unifying vision for humanity,” which would serve as an inspiration for generations to come.
“At this moment of profound sorrow, Pakistan stands in solidarity with our Catholic brothers and sisters worldwide and with all those touched by the extraordinary life of service.”
Italian and Vatican authorities have placed the area around St. Peter’s under tight security with drones blocked, snipers on roofs and fighter jets on standby. Further checkpoints will be activated on Friday night, police said.
Vast crowds of people on Friday morning packed Via della Conciliazione, the wide avenue leading to the Vatican, for the third and final day of the pope’s lying-in-state.
For a second night in a row, the Vatican kept St. Peter’s open past the scheduled hours to accommodate the queues, only closing the doors between 2:30am (0030 GMT) and 5:40am Friday.
Cardinal Kevin Farrell, Camerlengo of the Holy Roman Church, will preside at the Rite of Sealing of the Coffin of the late Pope Francis on Friday, April 25, at 8:00 PM, ahead of the papal funeral on Saturday morning.
The Catholic Church’s first Latin American pope died on Monday aged 88, less than a month after spending weeks in hospital with severe pneumonia.
The Argentine pontiff, who had long suffered failing health, defied doctors’ orders by appearing at Easter, the most important moment in the Catholic calendar.
It was his last public appearance.
Condolences have flooded in from around the world for the Jesuit, an energetic reformer who championed those on the fringes of society in his 12 years as head of the world’s 1.4 billion Catholics.
He used his last speech to rail against those who stir up “contempt... toward the vulnerable, the marginalized, and migrants.”
After the funeral, Francis’s coffin will be driven at a walking pace to be buried at his favorite church, Rome’s papal basilica of Santa Maria Maggiore.
The hearse will pass down Rome’s Fori Imperiali – where the city’s ancient temples lie – and past the Colosseum, according to officials.
Big screens will be set up along the route on which to watch the ceremony, Interior Minister Matteo Piantedosi said.
Francis will be interred in the ground, his simple tomb marked with just one word: Franciscus.
People will be able to visit the tomb from Sunday morning, as all eyes turn to the process of choosing Francis’s successor.
With inputs from AP
