Economic crises and the global debt pyramid - Economist

During the past and current months, many international institutions are discussing expected economic crises in many countries of the world, especially emerging countries. It is expected that there will be a crisis in the repayment of global debts with the collapse of the currencies of developing countries due to the decline in foreign exchange reserves.

Many countries have defaulted on sovereign debt over the past year, the most important of which are Lebanon, Sri Lanka, Suriname, and Zambia, in addition to Russia due to restrictions imposed on it by the United States of America, the European Union, and many countries of the world.

We find that Argentina has the largest amount of debt in the world, amounting to more than 150 billion dollars, and Ecuador and Egypt come behind it with debts ranging between 40 and 45 billion dollars.

Economists hope that many countries can avoid default, significantly if global markets calm down and the International Monetary Fund steps in to help.

Among the countries most at risk of default are:

In the first place, Argentina, the country in the South American continent, which holds the world record for defaulting on sovereign debt, is likely to add more debt to its balance, as the Argentine peso is now trading at a discount of nearly 50% on the black market, and reserves have fallen sharply and are traded The bonds are at just 20 cents to the dollar, less than half of what they were after the country's debt restructuring in 2020.

In second place in Ukraine. International institutions, including Morgan Stanley, have warned that the Russian-Ukrainian war will have a role in restructuring its debt, which exceeds $20 billion.

In third place, Egypt, the ratio of debt to GDP in Egypt is about 95%, and it is witnessing one of the largest foreign exchange outflows this year, which is estimated at about 11 billion dollars, and international institutions estimate that Egypt has debts of 100 billion dollars in hard currency over the past years. The next five years, including a massive $3.3 billion bond maturing in 2024.

In fourth place is Tunisia, where in Africa there are a group of countries that use the International Monetary Fund, but Tunisia appears to be one of the most vulnerable countries, with a budget deficit of nearly 10% and one of the highest public sector wage bills in the world, there are fears that getting Supporting and adhering to the International Monetary Fund may prove difficult due to President Kais Saied's quest to consolidate his grip on power.

After that, many countries such as Ethiopia and Pakistan come from economic crises that could increase the risks of not repaying the sovereign debt during the coming period.