Sudan leads the Arab countries – Al -Zawiya Net

Follow-up- Al-Zawiya Net- The Global Economy Prospects Report 2025 issued by the International Monetary Fund in April showed that Sudan is the highest debt between the Arab countries, as the percentage of public debt to the GDP reached 271.979% in 2024, and it is expected to decline to 251.98% this year.

This comes after Sudan suffered during the past decades from excessive borrowing, debt accumulation and benefits, and mismanagement, in addition to the sanctions imposed on it for political reasons, and its ability to obtain international financing has been registered. The secession of South Sudan in 2011 was also its consequences, as it led to a sharp decrease in oil exports and government revenues, so Sudan lost about 75% of oil production, 66% of its exports, and half government revenues, according to a World Bank report in September 2020.

The political turmoil after the 2019 revolution that overthrew Omar al -Bashir, and the civil war that has been taking place in the country for more than two years to undermine the economic and investment climate in the country.

In the second place, Lebanon comes, as the percentage of public debt to GDP reached 164.13%, as successive governments borrowed to finance the reconstruction process after the end of the Lebanese civil war in 1990, and the country witnessed a political and economic crisis since the end of 2019, which caused the collapse of the economy and increased rates of poverty, and a huge deficit in the balance of payments.

The spark of the unprecedented financial crisis erupted due to the large withdrawals of deposits, followed by the state’s failure to pay the Europond bonds in March 2020, and the economic conditions increased during the Korona pandemic, then the Beirut Port explosion exploded.

Since then, Lebanon has stopped paying all its obligations from the payments of the Europond bonds awaiting the restructuring.

Bahrain is in the third place among the highest -debt Arab countries, as the percentage of public debt to GDP reached 134% in the past year, and it is expected to rise to 141.4% in 2025. The Kingdom, the owner of the smallest economy among the Gulf Cooperation Council countries, was pressured on its financial resources after the decrease in oil prices in 2014, and again during the Corona pandemic, despite obtaining a rescue package of about 10 billion dollars from Saudi Arabia, Kuwait and the UAE in 2018, in support of the financial balance program.

The high debts of Bahrain and the increase in the financial deficit, the “Fitch” and “S & B Global Retnung”, pushed to reduce the Kingdom’s future outlook from stable to negative this year.

In Jordan, the percentage of public debt to the gross domestic product reached 95.9% during 2024, and it is expected to decline to 92.55% this year, according to the IMF, and after the public debt declined at a significant rate from the 1990s until 2007, it has returned to the second since 2009, as a result of the continued financial deficit and the rise in the current balance deficit, in conjunction with the weak economic growth, and the dependence on external financing to bridge the budget deficit.

The pressure on the Jordanian economy increased as a result of a series of regional events, such as the Iraq war, the Arab Spring revolutions, the Syrian conflict, the influx of refugees, then the Koruna and the Israel War on Gaza. The burden on a country that already suffers from a scarcity of resources, a rise in the energy bill, and a decline in the rates of tourism and investment.

The IMF data indicates that the percentage of public debt to the GDP in Egypt reached 90.93% in 2024, and that it will decrease to 86.59% this year. The pressure continued on the largest Arab country in terms of population during the past years, among them the depletion of foreign reserves after the January 25, 2011 and 30 2013 revolutions, the constant deficit in the budget, the high costs of debt service, and the dependence on external financing to bridge the financial deficit, along with the pandem The attacks launched by the Houthi group on the ships remained at the Strait of Bab al -Mandab.

It is noteworthy that the Arab countries with public debt rates to the high GDP also include Tunisia 83.1%, Yemen 70.94%, and Morocco 70.03%, according to IMF data from 2024.

Kuwait is the least religious country, with the percentage of public debt to GDP at 3.04%, and the Monetary Fund expects this percentage to rise to 7.35% this year. Kuwait, which relies heavily on oil, was forced to resort to withdrawing from the “General Reserve Fund” whose resources have shrunk, to finance the budget deficit. Last year, the fund sold some assets to the “Future Generations Fund” with which it is managed by the “General Investment Authority in Kuwait” (KIA).

It is worth noting that Kuwait paves the way to raise 6 billion dollars from the international debt markets by offering emitted bonds in dollars, after the government approved in March a long -awaited law paving the way for the Gulf state to sell international debt tools for the first time since 2017, after the legislation was suspended for years due to political differences. The law allows a maximum debt of 30 billion Kuwaiti dinars (about 98 billion dollars) over 50 years.

In the second place, Saudi Arabia is ranked 29.9%, and this percentage is expected to rise to 34.85% in 2025, according to the fund. The Kingdom knocked on the external borrowing doors for the first time in 2016 to finance the budget deficit and “Vision 2030” projects. However, the oil revenues, which represented 60.1% of the actual budget revenues in 2024, increased dependence on the private sector, and rationalizing spending are all factors that helped the Kingdom to maintain a low percentage of public debt to GDP.

The UAE comes in third place with 32.1% in 2024, the fund expects to reach 32.8% this year. Thanks to its transformation into a global center for trade, investment and money, a surplus of 7.1% of GDP in the 2024 budget, and the net foreign assets of 157% of the GDP in 2024, according to the estimates of the “Fitch Ritts” agency in a report issued on June 24 on confirming the credit rating of the UAE at (AA-) with a stable view, along with the diversification of the economy, the UAE maintained the UAE on the UAE. A moderate percentage of public debt to gross domestic product.

The study pointed out that if public debt is used in government investments, this is likely to lead to a rise in growth later, but the debt can be directed to other uses, such as financing tax cuts or other government spending aspects.

The study was concluded into 3 results; The first: The low -income countries can benefit from the increase in the percentage of public debt to the gross domestic product. The second: to reduce the initial debt levels, or to continue the path of reducing debt, enhances the possibility of countries benefiting from more loans. And the third: Participation in the initiative concerned with poor debt countries increases the country’s ability to benefit from additional loans.

On the other hand, a study published by the “Arab Monetary Fund” in March 2024 concluded that the Arab countries are moderate and high income, succeeded in exploiting the public debt to improve the potential growth in the long term and exceed the negative consequences in the short term. In low -income Arab countries, there is no evidence that public debt helps improve economic growth in the short or long term.

In general, the lesson here with debt spending, its use in investment, the creation and development of infrastructure, projects producing goods and services, education, and health, of course leads to a high and long -term GDP. While high debt countries allocate a large part of their revenues to pay the debt installments and their benefits.

On the other hand, the high public debt, especially the external debt, leaves the borrowing countries more likely to external shocks, such as the high global interest rates, exchange rate fluctuations, and geopolitical tensions, as the Israeli war on Gaza and the attacks followed by the Houthis on ships in Bab al -Mandab on Egypt’s revenues from the Suez Canal and Tourism, exacerbated the burdens and service of debt.

Source: Al Sharq Channel