There is a debt storm brewing in parts of the Middle East and North Africa (MENA). Debt across the region has been climbing, reaching very high levels in several countries (Chart 1). Egypt, Jordan, and Tunisia are in a precarious situation, their economic stability teetering as they grapple with the prospects of a debt crisis. Lebanon, already reeling from one of the worst economic crises in the world, is a cautionary tale. Its plunge into default has thrown a harsh spotlight on these countries’ acute debt-related challenges and their broader ramifications. The rising tide of debt, coupled with tough global economic prospects, is stirring up a perfect storm (Chart 2). This crisis has been fueled by scarcer low-interest financing and the affluent MENA oil producers’ reluctance to continue the unconditional financial support of the past. Exacerbating this complex equation are the difficult social conditions these countries face, leaving little room for significant fiscal consolidation. Consequently, maintaining debt sustainability is a colossal challenge for these countries, and it is growing ever more daunting. […]