Iran’s foreign debt in 2021 insignificant compared to developing countries: WB
World Bank (WB), in its latest International Debt Report (IDR), has put Iran’s foreign debt in 2021 at $10.349 billion, indicating that the Islamic Republic’s foreign debt is almost one-thousandth of the total external debt of developing countries in the mentioned year.
Based on the WB report, the total debt of all the world’s low- and middle-income countries amounted to $9.296 trillion at the end of 2021.
Iran’s total long-term external debt was reported to be $1.06 billion in 2021, 19 percent less than the figure for 2020 when the country’s long-term debt stood at $1.313 billion, according to the report.
The country’s short-term external debt in 2021, however, increased compared to the previous year and reached $2.5 billion. In the previous year, Iran's short-term debt amounted to $2.06 billion.
In August 2021, the International Monetary Fund (IMF) granted Iran access to its funds based on the entity’s Special Drawing Rights (SDR), after which about four billion dollars were loaned to the Islamic Republic. As a result, the total credits paid to Iran by the fund, which amounted to $2.054 billion in 2020 increased to $6.781 billion in 2021.
Based on the WB report, Iran managed to repay over $254 million of the above-mentioned debt in 2021 in addition to $46 million of interest.
In early November, the IMF in its latest regional economic outlook for “The Middle East and Central Asia Region (ME&CA)” also stated that Iran has the least foreign debt among the countries in the mentioned region.
The fund put the ratio of Iran’s external debt to its Gross Domestic Product (GDP) at 0.5 percent in its report.
Based on IMF data, the average ratio of foreign debt to total GDP for the countries of the region was estimated at 35.8 percent, while the figure for oil-exporting countries was reported to be 30.9 percent.
Iran has been ranked the world’s seventh country in terms of the lowest foreign debt to GDP ratio, according to established international sources.
Brunei, Liechtenstein, New Zealand, Turkmenistan, New Caledonia, Nigeria, Iran, Algeria, Greenland, and the Virgin Islands are the world’s top 10 countries with the lowest foreign debt to GDP ratio, respectively.
External debt is the portion of a country's debt that is borrowed from foreign lenders including commercial banks, governments, or international financial institutions. These loans, including interest, must usually be paid in the currency in which the loan was made.
Foreign debt as a percentage of GDP is the ratio between the debt a country owes to non-resident creditors and its nominal GDP.
Source: Tehran Times
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