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.

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Acuity Knowledge Partners

Acuity Knowledge Partners

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