The U.S. Federal Reserve, along with other central banks, are expected to increase interest rates and worsen the global debt crisis,According to the Jubilee Debt Campaign, a report highlighting how important it is for countries in need was released.

As it looks towards tightening its monetary policy, the Federal Open Market Committee is meeting this week. contain soaring inflation. Some analysts expecting the central bank to hike rates four timesFrom their lows during the pandemic-era in 2022.

Jubilee Debt Campaign released a report Sunday highlighting that the debt payments of developing countries increased 120% in between 2010-2021 and they are at their highest point since 2001. In 2021, 14.3% of the government’s revenues were channeled towards external debt payments. This is an increase from 6.8% (2010). Payments are expected to rise in 2020.

According to the report, countries are experiencing a sharp rise in their debts, which is hampering economic recovery following the pandemic. Rising U.S. interest rates and global rates for 2022 may also be contributing factors.

Kristalina Georgieva is the managing director at International Monetary Fund. Fed rate hikes could “throw cold water” on already weak recoveriesIn certain countries. In certain countries, higher U.S. interest rate and a consequent rise in the greenbackIt could lead to countries having to pay more for their dollars-denominated debt obligations.

Heidi Chow (executive director, Jubilee Debt Campaign) stated that “the debt crisis continues and engulfs lower income countries with no end in sight except there is urgent action to relieve debt.”

“The crisis of debt has already deprived countries of the necessary resources to deal with the climate emergency. The ongoing disruption caused by Covid is continuing, and rising interest rates could lead to countries sinking in more debt.”

Chow called upon G-20 leaders not to “bury their heads in sand”. He argued that global economic needs urgently a comprehensive debt cancellation program which forces private lenders to participate in debt relief.

According to the organization’s data portal, 54 countries are facing current debt crises. This is because debt payments are limiting governments’ ability preserve their citizens’ social and economic rights.

An additional 14 countries are also at risk of public or private debt crisis. 22 countries could be in private sector debt crisis only, and 21 public sector crises.

The following are the external debt payments made by low- and middle-income government in 2022: 47% go to private lenders; 27% go to multilateral institutions. 12% ChinaAccording to JDC statistics, 14% of other governments are included.

David Malpass of the World Bank called for debt relief urgently, increased debt transparency, and a rebalancing in creditor and debtor rights. G-20 members created the Common Framework 2020 to help countries that are facing liquidity issues and insolvency.

But, no country has had its debt cancelled by any of those countries that have been admitted to this framework. Many African countries are facing debt crisis, according to the African Forum and Network on Debt and Development. Zambia in November 2020The continent’s first default during a pandemic.

Jason Braganza is the executive director of AFRODAD. He stated, “Covid-19 increased an already grave situation and will reverse any socio-economic gains from the past decade.”

“We’ve consistently stated that current debt relief methods aren’t adequate. We called for truly inclusive debt relief with all creditors, and a comprehensive program of debt cancellation.”