| Summary: | These opening remarks were delivered by World Bank Group President David Malpass during the Launch of the International Debt Report 2022 on December 6, 2022. He spoke about the World Bank identified the stagflation risk early in that year which brings three risks: a global recession in 2023; a multi-year period of slow growth; and widespread asset repricing as higher interest rates are applied, and hedges run out. He mentioned that the interest rates were very low for a long period allowing a huge use of capital by fully-funded governments and business sectors, and this misallocation of global capital undercuts growth and productivity and will take time to repair. He spoke about energy prices that are a major factor, with shortages of fertilizer and food hitting people in the poorest countries particularly hard. He highlighted on the combination of extremely high government debt levels and rising interest rates will cause heavy absorption of global capital by advanced governments for a prolonged period. He said that the World Bank's latest debt statistics report released that day makes it clear that a debt crisis in the world's poorest countries is intensifying. He mentioned that to address the increase in debt and the new composition, he has focused on improvements in three areas - debt sustainability, transparency, and restructuring. He spoke on debt restructuring, where new mechanisms are needed to reflect the new creditor landscape. He concluded by saying that together with the Kristalina Georgieva from the IMF, they will engage with Chinese authorities and with their policy banks - the China ExIm Bank and the China Development Bank on the need for faster progress on resolving unsustainable debt and the need for more transparency
|
|---|