UNDP warns overlapping crises could plunge developing nations into deeper debt distress

Alexander De Croo, head of the United Nations Development Programme, warned that a combination of higher energy costs, an unprecedented El Niño event and rising global borrowing rates is creating conditions for developing countries that resemble the pandemic-era debt suspension. He indicated that the situation could spark a domino effect, pushing many nations into financial trouble, but did not explicitly request fresh debt relief.

The concerns will be a central topic at the upcoming International Monetary Fund and World Bank meetings in Bangkok from October 12-18. UNDP chief economist George Grey Molina noted that several governments are now passing on higher energy prices to consumers and rolling back subsidies, further eroding fiscal buffers. He said the next two months are critical as bond markets and oil prices evolve, and that protests have already erupted in ten countries. The agency’s surveys show most of the 26 nations it polled view the crisis as a top priority and expect conditions to worsen.