UN body warns of a serious debt crisis unfolding across the world

London: As inflation is fueling prices of goods, a grimmer yet report warns that the poorest parts of the world will face a serious debt crisis.

The report signalling the worst scenario comes ahead of the International Monetary Fund and World Bank holding meetings in Washington this week.

The United Nations' Development Programme (UNDP) in its report said that estimated 54 countries, where more than half of the world's poorest live, need immediate debt relief, according to Reuters.

If measures to salvage them are not taken, odds are high for them to face extreme poverty, it suggests.

Mincing no words the report said that the likelihood of worsening the situation from the unfolding debt crisis is high.

The latest warning comes amid the fears of a recession while worsening economic situations are being reported from Sri Lanka and Pakistan to Chad, Ethiopia and Zambia.

UNDP administrator Achim Steiner suggests measures to tackle the situation by writing off debt, offering relief, and creating breathing-in bonds.

"It is urgent for us to step up and find ways in which we can deal with these issues before they become at least less manageable and perhaps unmanageable," he was reported as saying.

The report calls for effective debt restriction to tackle the rise of poverty.

The UNDP report calls for a recalibration of the G20-led Common Framework which is aimed at helping countries facing a crisis from covid pandemic-induced debt.

Expanding the Common Framework eligibility could help more indebted countries to utilize the scheme than just the 70 or so poorest countries, according to the report.