India's Public Debt Second Highest After China: UNCTAD
![Indias Public Debt Second Highest After China: UNCTAD Indias Public Debt Second Highest After China: UNCTAD](https://www.deccanchronicle.com/h-upload/2024/06/05/1095066-untitleddesign2.webp)
Chennai: India stands second after China in terms of public debt in the developing world and the public debt in developing countries is rising at twice the rate of that in developed countries. Governments are now allocating twice as much resources towards servicing this debt relative to revenues compared to a decade ago, finds the UN's trade and development body, UNCTAD.
Global public debt continues to increase rapidly, driven by cascading crises as well as the sluggish and uneven performance of the global economy. In 2023, public debt, comprising domestic and external general government debt, reached $ 97 trillion, up by $ 5.6 trillion from 2022.
Public debt in developing countries is rising at twice the rate of that in developed countries and in 2023 touched $29 trillion, accounting for 30 per cent of the global total. This is a substantial increase from a 16 per cent share in 2010.
Among the developing countries, China has the highest level of debt at $14773 billion followed by India with $2956 billion. Brazil has a public debt of $1841 billion, while Mexico has $950 billion and Egypt $378 billion.
In the developing world, external public debt service requirements remain high, reaching $365 billion in 2022. Governments are now allocating twice as much resources towards servicing this debt relative to revenues compared to 2011, leaving a declining share of resources for investments in sustainable development. Almost half of developing countries are allocating at least 6.3 per cent of their export revenues to external public debt service.
Governments in developing countries borrow from various sources, including bilateral, multilateral and private creditors. Since 2010, the portion of external public debt owed to private creditors has risen across all regions, accounting for 61 per cent of developing countries’ total external public debt in 2022.
The borrowing costs of developing countries far exceed those of developed countries. Developing regions borrow at rates that are 2 to 4 times higher than those of the US and 6 to 12 times higher than Germany. High borrowing costs increase the resources needed to pay creditors, which makes it difficult for developing countries to finance investments. Net interest payments on public debt reached $847 billion in 2023, a 26 per cent increase compared to 2021.