Debt and debt sustainability

Countries face pressing demands for additional public investment in the Sustainable Development Goals (SDGs), but high debt burdens may threaten their ability to raise sufficient financing. Public debt levels have continued to rise since the publication of last year’s Task Force report, with some middle-income countries experiencing debt levels last seen during the debt crises of the 1980s. Debt vulnerabilities in developing countries exist due not only to higher levels of debt, but also because of increased risks from a shift in debt composition. A rise in external debt that carries variable interest rates and greater reliance on commercial debt have increased refinancing risks. A more prominent role of non-traditional creditors and market-based financing also presents new challenges for debt crisis resolution.