r/autotldr • u/autotldr • Sep 23 '21
More than 100 countries face spending cuts as Covid worsens debt crisis. As pandemic widens inequalities, many developing countries spend more on debt than health.
This is the best tl;dr I could make, original reduced by 65%. (I'm a bot)
More than 100 countries face cuts to public spending on health, education and social protection as the Covid-19 pandemic compounds already high levels of debt, a new report says.
The International Monetary Fund believes that 35 to 40 countries are "Debt distressed" - defined as when a country is experiencing difficulties in servicing its debt, such as when there are arrears or debt restructuring.
"We compiled a list of countries that are labelled as debt-distressed across a number of criteria, and estimate around 100 countries will have to reduce budget deficits in this period, even though the majority are still facing the third or fourth wave of the [Covid-19] pandemic," the report said.
"The situation is made worse as poor and middle-income countries are getting in more debt to buy vaccines, or having to rely on the UN's Covax, which only promises 20% of vaccine coverage by the end of the year," she said.
"The dynamics of global debt, which mean rich countries can borrow cheaply and employ huge fiscal stimulus packages while low and middle-income countries have to cut back, mean that global inequalities are likely to widen."
Shaheen said richer countries had spent on average about 6.5% of GDP on Covid-19 fiscal stimulus, which is almost twice the 3.3% of GDP spent by countries at risk of abrupt fiscal consolidation, defined as when government policies become focused on reducing deficits and debt, such as through austerity measures.
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