The World Bank’s Base Debt Statistics

The World Bank’s latest annual debt data roundup through end-2012 sounded potential alarms for the 125 developing countries covered, where burdens nonetheless paled against high-income economies where the G-7 alone had $45 trillion in external obligations at 125 percent of GDP. Net flows were $415 billion and jumped 20 percent outside China with private borrowers taking 90 percent of the total. Including equity and FDI components, capital allocation was $1.1 trillion or around 4.5 percent of GDP, as big emerging market government debt ratios were half the industrial country measure. The cumulative foreign debt stock rose to $4.8 trillion, with the long-term portion split 55-45 percent between state and commercial recipients and the short-term share one-quarter of the amount. Ten countries got 70 percent of the activity including Kazakhstan and Ukraine in the CIS as the debt-export level was moderate at 70 percent and HIPC official relief candidates received full reductions. Non-resident purchase of domestic bonds drove record issuance in the category to $225 billion, but China continued to represent one-third of cross-border capital and portfolio equity remained the “most volatile” area with a $100 billion surge after 2011’s “complete collapse” as Nigeria suddenly appeared as a major destination. In the Asia-Pacific Mongolia and Papua New Guinea were first-time state placements while Chinese and Malaysian companies dominated the private sector fraction. The region’s debt/GDP load at 15 percent is half the emerging economy norm, with reserve coverage also superior. In Europe-Central Asia 60 percent was in the form of FDI concentrated in five places including Azerbaijan, Hungary and Turkey which have slipped in business climate rankings. Mexico and Brazil topped Latin America, where official commitments turned positive at $3.5 billion from net repayments the previous year. In MENA bilateral lines increased post-Arab spring from Saudi Arabia and Lebanon and Morocco managed global bonds. In the Sub-Sahara South Africa and Nigeria attracted half of capital, and multilateral sources were two-thirds of official lending with World Bank IDA facilities focused on Ethiopia and Tanzania. Brazil, China and India have been donors in their own right dedicated to infrastructure projects particularly in Ghana, Mozambique and Senegal. Cote d’Ivoire and Guinea reached HIPC completion point to unlock $6.5 billion in combined forgiveness during the period.

Among advanced economies Greece, Finland and Portugal had the steepest external debt over 200 percent of GDP, while Israel, Korea and Russia were at the opposite end under 40 percent.  Canada, Germany and Italy had the biggest rises in contrast with flat showings and outright contractions in France, the US, Japan and the UK. The last has the highest overall public and private ratio at 400 percent of output, while the EU government average was 80 percent at odds with the developing world’s “downward trajectory,” according to the report. Its domestic currency resort at almost 60 percent overall has been “remarkable” in reshuffling the numbers, the data bank added.