World Bank Reports on Poorest Countries' Financial Struggles Since 2006

The World Bank has reported that the 26 poorest countries are facing unprecedented levels of debt, the highest since 2006, and are struggling to recover from the impacts of the COVID-19 pandemic. These nations have seen a significant decline in per capita income, averaging a 14 percent drop from 2020 to 2024. The report highlights that while the global economy has largely rebounded, these low-income economies remain in a state of chronic emergency, requiring substantial investment to meet development goals. To address their dire financial situation, these countries need an annual investment equivalent to 8 percent of their GDP through 2030, which is double the average investment of the past decade. However, official development assistance has decreased, reaching a 21-year low of 7 percent of GDP in 2022. The International Development Association (IDA) has been crucial in providing support, helping to sustain job creation, education, healthcare, and access to essential services like electricity and clean water. Natural disasters pose a significant threat to these economies, causing average annual losses of 2 percent of GDP, which is five times higher than losses in lower-middle-income countries. Additionally, adapting to climate change is disproportionately expensive for low-income nations, costing them about 3.5 percent of GDP annually. Experts suggest that while these countries can improve their tax systems and public spending efficiency, they will also require increased international cooperation and support to mobilize resources and implement necessary structural reforms.