How COVID-19 is Heightening the Economic Risks in Gavi-supported Countries

This article originally appeared on Gavi’s website. 

Debt levels in 73 Gavi-supported countries increased by close to 50% between 2011- 2018, and governments spent almost as much on paying interest on these debts as they did on their healthcare systems. Although overall debt levels have been far from historical highs, almost a third of Gavi countries were, according to the International Monetary Fund (IMF), already at high risk of being unable to meet their debt obligations, even before the COVID-19 crisis.

A new study of debt dynamics in Gavi-supported countries reveals the extent and speed of this debt accumulation. With the economic shock caused by COVID-19 and the very significant drop in commodity prices observed in recent months – particularly oil – debt servicing may become untenable in many countries and may even jeopardise the delivery of health and other services if it crowds out government investments in the social sectors. As a result, many highly-indebted countries may seek a suspension of interest payments or outright debt relief, further expanding on the G20’s debt moratorium agreed to in April 2020.

While low-income countries (LICs) have tended to rely on credit from multilateral lenders, such as the World Bank, the IMF, and regional development banks, middle-income countries (MICs) have relied more extensively on the private sector. This could make access to borrowing, needed to respond to COVID-19 and any potential debt restructuring, if required, more complex and difficult.

Read the full article, including key findings from the study, here.

Leave a Reply

Your email address will not be published. Required fields are marked *

You May Also Like

Linked Community News April 2023

This newsletter is available in English, Portuguese, Spanish, and Russian. The Linked Network is working hard to plan engaging and action-oriented regional workshops and study tours focused on preventing backsliding in coverage through building and sustaining high-performing and equitable immunisation programmes. We are also planning cross-regional workshops and webinars among countries planning for the introduction … Continued

Resource Round-up: World Immunisation Week 2023 – The Big Catch-up

This resource round-up is available in English, Portuguese, Spanish, and Russian. With three years of pandemic-related disruptions to vital health services and strained health systems, the world lost 30 years of progress to protect children with routine immunisations, an essential component to primary health services. This year’s World Immunisation Week theme, centered around “The Big … Continued

Resource Round-up: Top 10 Most Popular Linked Resources from 2022

This resource round-up is available in English, Portuguese, Spanish, and Russian. Critical to immunisation programme performance is country capacity to identify and address risks to sustainable coverage and to sustainably introduce new vaccines. We compiled the top 10 most popular Linked-produced resources from last year to help you identify the strategies, good practices, and lessons … Continued