Far from the headlines, rising interest rates are taking their toll on emerging and developing countries: the Global South paid more on its debt last year in principal and interest repayments than it received in development aid and new loans.
In 2022, the first year of sharp rate hikes to curb rising inflation, the countries of the Global South paid almost $50 billion more in debt than they received in new financing, according to data from the UN's trade and development arm (UNCTAD).
We are witnessing a worrying trend: financial flows are flowing out of the developing countries that need them most and towards their creditorsRebeca Grynspan, Secretary-General of the United Nations Conference on Trade and Development.
These are nations that need external resources to complement their internal efforts and, without a positive trend in external financing, their capacity for growth is severely limited. The fiscal constraints imposed by this situation make it almost impossible to achieve Sustainable Development Goals (SDGs).
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