The increasing global South debt crisis and cuts in public spending

In this 11-page briefing we analyse how the debt payments of 63 countries in the global South have increased and are projected to increase. We also look at how public spending has changed between 2015 and 2019 in 60 of the countries for which there is data. We find that:

1. Debt payments have grown rapidly and could continue to do so until at least 2022. Average public external debt payments in 2022 could be three times as high as in 2011, and higher than at the turn of the millennium.
Average government external debt payments for the 63 countries reached a low of 5.5% of revenue in 2011. By 2019 they have grown to 12.4% of government revenue (an increase of 125%) and are expected to reach between 12.8% and 17.4% by 2022 (increases of 133% to 216%).

2. Real public spending per person in the countries with the highest debt payments is falling. In contrast, it has been rising in the countries with the lowest debt payments.
For the 15 countries spending over 18% of revenue on debt payments, 14 saw real public spending per person fall between 2015 and 2018. On average, these 15 countries had cuts in public spending of 13% between 2015 and 2018.

In contrast, for the 30 countries with the lowest debt payments, public spending increased by 14% between 2015 and 2018.

Read the full briefing here.

Street sellers in front of a mural in Lusaka, capital of Zambia. In 2019 Zambia’s public spending is due to be 18% lower than in 2015 with further cuts anticipated by the IMF for several years to come. (Photo David Brown / Flickr).

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