Key Findings from the Report

 The United Nations Conference on Trade and Development (UNCTAD) has released the "A World of Debt Report 2024", highlighting the potential for public debt to support development through funding essential expenditures. However, it also cautions that excessive debt growth presents significant challenges, particularly for developing countries.

The 2024 report warns of escalating debt risks and calls for urgent global action to maintain stability.

Key Findings from the Report:

1. Global Debt Surge: Public debt reached $97 trillion in 2023, with debt in developing countries growing at twice the pace of developed nations. India's public debt stood at $2.9 trillion.

2. Debt Servicing Strains: In 54 developing nations, more funds are spent on servicing interest payments than on social sector spending.

3. Unequal Financial System: Developing countries are paying 2 to 12 times more in interest than developed nations.

Challenges Stemming from Rising Global Public Debt:

1. Debt Overhang: High debt levels can hinder economic growth by reducing investment and consumption.

2. Liquidity Challenges: The withdrawal of nearly $50 billion by private creditors from developing countries has intensified liquidity pressures.

3. Debt Restructuring Barriers: The predominance of Western-dominated institutions (private, multilateral, and bilateral creditors) in the creditor base makes debt restructuring costly.

Recommendations:

1. Implement debt restructuring mechanisms to address coordination issues.

2. Expand contingency financing to prevent debt crises.

3. Increase the participation of developing countries in global financial governance.

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