Monday, 1 April 2024 04:06
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The IFC’s private sector portfolio had a low default rate of 4.1% from 1986 to 2023, suggesting the untapped potential and resilience of private sector investments in emerging markets.
For investments rated as “weak” by IFC’s internal rating system, the default rate was only 2.6% during the period between 2017 and 2023, indicating that even investments considered higher risk can perform better than could be expected.
For sovereign borrowers, defaults are rare, averaging just 0.7% annually, and the World Bank typically recovers more than 90% of the amount owed, including both principal and interest. This underscores the World Bank’s preferred creditor status and its ability to effectively manage sovereign credit risk.
Sovereign default losses range from 0.01% to 58.5%, reflecting the effect of interest rates and length of time in default.
