A country need not run out of money to find itself in a debt crisis. It only has to run short of US dollars to pay for its energy.
At the recent International Monetary Fund-World Bank annual meetings in Bangkok, the IMF, which expects global economic growth of 3.1 per cent this year and 3.4 per cent the next, cautioned that energy-importing and lower-income economies face a harder road, even as those riding the artificial intelligence boom fare relatively well.
According to the World Bank’s International Debt Report, between 2022 and 2024, low- and middle-income countries paid US$741 billion more in debt repayments and interest than they received in new external financing. As buffers drain, the next energy shock could push vulnerable economies over the edge.
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