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Highlights
The money saved by replacing expensive debt with cheaper financing will be used to improve education across the country. This will be the first debt-for-development swap of its kind supported by the World Bank Group.
Developing countries spent a record $1.4 trillion to service their foreign debt as their interest costs climbed to a 20-year high in 2023, the World Bank’s latest International Debt Report shows. Interest payments surged by nearly a third to $406 billion, squeezing the budgets of many countries in critical areas such as health, education, and the environment.
Multilateral development banks (MDBs) today issued a joint statement at COP29 in Baku outlining financial support and other measures for countries to achieve ambitious climate outcomes. MDBs estimate that by 2030, their annual collective climate financing for low- and middle-income countries will reach USD 120 billion, including USD 42 billion for adaptation, and MDBs aim to mobilize USD 65 billion from the private sector.
In response to feedback from countries, the World Bank’s Climate Resilient Debt Clause (CRDC) now covers all natural disasters, including droughts, floods and health emergencies like pandemics. Previously, two types of natural disasters— tropical cyclones and earthquakes—were eligible under the CRDC, which allows eligible countries to defer principal and/or interest repayments on IBRD and IDA loans for up to two years.
This early pledge announcement comes ahead of the final IDA21 replenishment meeting scheduled for December 5-6, 2024, in Seoul, South Korea. The increase underscores Croatia's recognition of the urgent need for concessional financing as global crises disproportionately impacts vulnerable populations.
Domestic food price inflation remains high in many low- and middle-income countries. Inflation higher than 5% is experienced in 70% of low-income countries (6.2 percentage points lower), 47.8% of lower-middle-income countries (3. percentage points lower), 36% of upper-middle-income countries (2.0 percentage points lower), and 9.1% of high-income countries (0.2 percentage points higher).
1.2 billion people face life-changing risks through exposure to at least one critical climate hazard, such as heatwaves, flooding, hurricanes, and drought. However, a new report from the World Bank Group outlines how faster development and sustainable economic growth can reduce climate change-related economic and quality of life losses.
Global commodity prices are set to tumble to a five-year low in 2025 amid an oil glut that is so large that it is likely to limit the price effects even of a wider conflict in the Middle East, according to the World Bank’s latest Commodity Markets Outlook. Even so, overall commodity prices will remain 30% higher than they were in the five years before the COVID-19 pandemic.
