Saudi Arabia’s finance minister has highlighted national debt as a looming threat to global markets, particularly affecting low-income countries and emerging economies. He emphasized the lack of fiscal buffers in these regions, making them vulnerable to market disruptions.
Speaking at the Future Investment Initiative in Riyadh, Mohammed Al-Jadaan stressed the need for solutions from international bodies like the IMF and G20 to mitigate potential economic shocks. He urged global leaders to remain vigilant to avoid being caught off guard by debt issues.
Al-Jadaan also discussed the challenge of achieving a “soft landing” for economies as central banks tackle inflation. Recent meetings with the IMF, World Bank, and G20 have underscored the resilience of the global economy and the necessity of addressing sovereign debt, especially in low-income nations.
With global public debt reaching $97 trillion in 2023, the UN has called for urgent reforms. In Africa, the debt burden has intensified, with the number of countries surpassing a 60% debt-to-GDP ratio rising dramatically over the past decade.
The cost of servicing debt has increased, impacting emerging markets severely. Al-Jadaan noted that many low-income countries now spend more on debt service than on essential services like healthcare, education, and climate action combined. He called for collective global efforts to find a solution to this pressing issue.