Fears are growing that action by the US central bank to combat high inflation will trigger a fresh debt crisis, as it emerged poor-country repayments to creditors are already running at their highest level in two decades.
The Jubilee Debt Campaign said debt payments by developing countries had more than doubled since 2010 and were likely to increase further if, as expected, the Federal Reserve pushed up interest rates.
Urging deeper debt relief, the JDC said payments to creditors already accounted for 14.3% of poor-country government revenue in 2021, up from 6.8% in 2010 and the highest level since 2001.
Many poor countries have borrowed in US dollars, exposing them to the dual risk of higher borrowing costs and a weakening of their currencies against the greenback.
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Fears grow that US action on inflation will trigger debt crisis | Inflation | The Guardian
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