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Bond market turmoil is squeezing public spending in developing nations
UN warnings cited in the piece say heavily indebted countries are facing higher debt-servicing costs that displace spending on public services and long-term investment.
Policymakers across major economies are assessing the costs of bond market turmoil, as investors pull back from government bonds and push up borrowing costs globally, according to the Guardian Economics.
The outlet says the hardest hit are heavily indebted developing countries, which have limited ability to influence global investor decisions but still “pay the price,” with debt-servicing costs crowding out spending on public services and future investment.
Ahead of finance ministers and central bankers gathering in Bangkok for the annual meetings, the piece notes that the turmoil has been linked to the war in the Middle East and US policy, including a “spendthrift” White House, as markets respond by repricing risk.
The article also frames Andy Burnham’s push for debt relief as an effort to address the impact on developing nations, drawing a comparison to earlier calls for debt support from figures like Brown and Blair.