Treasury & Capital Markets /
Viewpoint
Developing countries need debt sustainability refocus
For too long, the global framework for assessing and managing debt sustainability in low- and middle-income countries has rested on a glaring fallacy. The entire system needs to be rethought, moving from a narrow focus on debt reduction to one that accommodates growth-enhancing investment
Kevin P. Gallagher, José Antonio Ocampo and Kunal Sen
20 May 2025
A slowing global economy, rising trade tensions and increased risks of recession could mean a perfect storm for low- and middle-income countries ( LMICs ) burdened by high sovereign debt. Faced with exorbitant borrowing costs and an increasingly jittery international environment, these countries’ potential for economic growth and development will be severely curtailed.
