A direct result of the global COVID-19 pandemic has been unprecedent levels of national and government borrowing, just look atThe United Kingdom’s level of borrowing. The World Bank has called for urgent, decisive and comprehensive action to mitigate against a potential debt crisis, stating that borrowing levels are at a 30 year high; and for emerging and developing markets and nations represent potential significant risk and vulnerability.
The bank has issues its Global Economic Prospects (GEP) report, with projects of only 4% growth for 2021, some 5% below pre crisis levels and reports that several countries have already defaulted on debts, with others under real stress, with warnings that the wave of debt could match the levels seen in the Latin American crisis of the 1980s and the Asian financial crisis of the 1990s.
A major problem is the unwillingness of private sector creditors, and countries like China, to participate on debt alleviation packages.
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