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Tackling the World’s Hidden Debt Problem

From the COVID-19 pandemic to advanced-economy interest-rate hikes, developments over the last few years have left many developing economies struggling to repay their debts. But the problem might be even bigger than the world realizes, as many sovereign debts are hidden, undisclosed, or opaque. This prevents policy makers and investors from making informed decisions. Some low-income countries have made progress on disclosing their debts: the latest Debt Reporting Heat Map shows a rise in disclosure from 60 percent in 2021 to 80 percent today. But other countries have regressed, and significant gaps and weaknesses remain. For example, information might not be released swiftly enough or in adequate detail, and countries might disclose only central-government debts, leaving out other public and publicly guaranteed liabilities.