LONDON, June 26 Reuters The debt crisis risk that has overshadowed the global economy for four years is beginning to recede, the Paris Club of rich creditor nations said in its 2023 annual report on Wednesday.

A string of defaults, from Zambia to Sri Lanka, began in 2020 when the COVID19 pandemic triggered a series of economic shocks that continued into last year with the fallout from Russia39;s war in Ukraine and rising global interest rates compounding pressure on fragile finances in many poor nations.

Now, the group said the tide is shifting, even as debt restructuring talks loom in countries such as Ukraine and deadly protests erupt in Kenya over tax rises aimed at reigning in government debt.

The spectre of another major debt crisis is slowly receding, the group said in a report released on the sidelines of its annual meeting in Paris.

But vigilance remains the order of the day at a time when many borrowers have significant external repayments falling due, limited fiscal space and large investment needs.

The Paris Club, made of 22 official creditor nations, said the return of SubSaharan African countries to Eurobond markets this year, a stabilization in lowincome country debt levels and a potential peak in global interest rates gave cause of optimism.

However, several concerns lurk between the lines of the report, including over whether the mechanism used to coordinate debt talks for the world39;s poorest countries dubbed the Common Framework is fit for…