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International Debt Statistics 2018 shows BRICs doubled bilateral lending commitments to low-income countries in 2016 to $84 billion

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The 2018 edition of International Debt Statistics (IDS) has just been published.

IDS 2018 presents statistics and analysis on the external debt and financial flows (debt and equity) of the world’s economies for 2016. It provides more than 200 time series indicators from 1970 to 2016 for most reporting countries. To access the report and related products you can:

This year’s edition is released less than 10 months after the 2016 reference period, making comprehensive debt statistics available faster than ever before. In addition to the data published in multiple formats online, IDS includes a concise analysis of the global debt landscape, which will be expanded on in a series of bulletins over the coming year.

Why monitor and analyze debt?

The core purpose of IDS is to measure the stocks and flows of debts in low- and middle-income countries that were borrowed from creditors outside the country. Broadly speaking, stocks of debt are the current liabilities that require payment of principal and/or interest to creditors outside the country. Flows of debt are new payments from, or repayments to, lenders.

These data are produced as part of the World Bank’s own work to monitor the creditworthiness of its clients and are widely used by others for analytical and operational purposes. Recurrent debt crises, including the global financial crisis of 2008, highlight the importance of measuring and monitoring external debt stocks and flows, and managing them sustainably. Here are three highlights from the analysis presented in IDS 2018:

Net financial inflows to low-and middle income countries grew, but IDA countries were left behind

In 2016, net financial flows into low- and middle-income countries grew to $773 billion - a more than three-fold increase over 2015 levels, but still lower than levels seen between 2012 and 2014.

However, this trend didn’t extend to the world’s poorest countries. Among the group of IDA-only countries, these flows fell 34% to $17.6 billion - their lowest level since 2011. This fall was driven by drops in inflows from bilateral and private creditors.

Most IDA-only countries remain heavily dependent on official, concessional sources of financing. But in recent years, bond issuances and other private sources of financing have accounted for an important share of inflows. This largely came to a halt in 2016 as tighter market conditions and credit rating downgrades curtailed market access and deterred commercial bank lenders.

Net inflows from private creditors collapsed, falling to $1.7 billion from $7.7 billion in 2015. This downturn in financing from private creditors was exacerbated by a 24 percent fall in inflows from bilateral creditors, but the increase in new bilateral loan commitments suggests this may only be temporary.

A doubling of bilateral lending, driven by BRICs, notably China

New loan commitments from bilateral creditors to low- and middle-income more than doubled in 2016 to $84 billion. This rise was driven by financing from other low- and middle-income countries, primarily the BRICs, and notably China with its “One Belt One Road” initiative to build an integrated international economic corridor encompassing more than 60 countries in various regions.

Foreign direct investment fell to its lowest level in 8 years

Traditionally, FDI has been the largest and least volatile component of external financial flows to low- and middle-income countries but 2016 showed that it is not immune to adverse developments in the global economy. FDI inflows fell 10 percent to $481 billion - a level not seen since 2009.

As widely reported, this decline reflected fragility of the global economy, persistent weak aggregate demand, sluggish growth in some commodity-exporting countries, and a slump in profits earned by multilateral enterprises; factors that outweighed the positive benefits from continued improvements in business and regulatory environments and burgeoning domestic markets in many low- and middle-income countries.

Compiling, curating and publishing comprehensive, high-quality debt statistics

While the dissemination format has changed over the years, the core purpose of these statistics continues to be the coordinated and comprehensive measurement of stocks and flows of the external debt of developing countries. They are used by client governments, economists, investors, financial consultants, academics, bankers, and a broad spectrum of the development community.

The new IDS format includes aggregate tables detailing the debtor and creditor composition, maturity structure, and debt burden, in relation to GNI; export earnings for each country and relevant regional and income groups; and a user guide.

You can look forward to more IDS 2018 content here on the Data Blog over the coming months, and on @worldbankdata on Twitter. If you have any questions related to IDS or our other data products, please visit our Data Helpdesk.