Countries eligible to borrow from the International Development Association (IDA) entered the COVID-19 crisis already facing elevated debt levels and weak fiscal positions.

The pandemic is now placing enormous pressure on these countries to finance additional expenditures for relief and recovery amid shrinking fiscal revenues and limited access to sustainable financing.

This intensifies debt risks at a time when these countries are already vulnerable.

Almost one year into the crisis, the proportion of IDA countries (assessed using the Low-Income Country Debt Sustainability Framework) in or at high risk of debt distress has climbed to 55 percent from 50 percent, continuing the deteriorating trend evident since 2013.

As countries look to revive growth and embark on a resilient recovery from the pandemic, they will need access to scaled up amounts of sustainable financing and a redoubling of efforts to address debt vulnerabilities. IDA has responded swiftly with a substantial upsurge in highly concessional financing.

A version of this article appears in the print on March 4, 2021, of The Himalayan Times.