Debt

Vulnerabilities in LICs: 40 of 73 DSSI-eligible countries (55 percent) are at high risk or already in debt distress

Evolution of the Risk of Debt Distress

(in percent of DSSI-eligible countries with LIC DSAs)

 8 DSSI countries are in external arrears or in an ongoing or impending debt restructuring.

 Another 32 are at high risk of debt distress out of which 4-6 countries appear highly vulnerable to significant financing gaps emerging due to low levels of reserves and/or rising GFNs.

 Among the DSSI countries in debt distress or at high risk:

► 4 requested a debt treatment under the CF (Chad, Ethiopia, and Zambia in 2021 and Ghana recently).

► 1 (Somalia) is in a HIPC process. (NB: Sudan, while not DSSI-eligible, is also in a HIPC process.

► 1 (Malawi) has engaged a restructuring through bilateral negotiations.

► 2 (Djibouti and Lao PDR) indicated an interest to restructure/reprofile their debt bilaterally.