Worsening sovereign debt crises — a cause for worry

The domino effect:

A significant number of countries are heading in the same direction as Sri Lanka, according to the World Bank.

  • Turkey: With India’s recent ban on wheat exports, Turkey also faces a food shortage.
  • Argentina: After defaulting on debt repayments nine times, the country is awaiting support from the IMF to avoid its 10 th
  • Countries such as Tunisia, Lebanon, Kenya and South Africa and some states in India have debt-to-GDP ratios identical to Sri Lanka’s.

How can they prevent the looming debt crisis?

They need to be proactive if they are to prevent a domino effect. We list a few action plans below.

1. Choosing better lending options

Nations must be wary when choosing sources of aid, borrowing and income. Amid such crises, those living in low-income countries find it difficult to afford the basics. Studies show that increasing taxes and foreign aid could help.



Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
Acuity Knowledge Partners

Acuity Knowledge Partners


We write about financial industry trends, the impact of regulatory changes and opinions on industry inflection points. https://www.acuitykp.com/