Debt and Financial Constraints

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Debt and financial constraints are critical issues affecting both countries and companies. Financial constraints refer to the limitations firms face in accessing external funds, such as debt and equity, which can hinder their ability to invest in growth opportunities[1][3]. For countries, unsustainable debt conditions can severely limit their capacity to invest in essential infrastructure, including clean energy projects. This situation is exacerbated by rising global interest rates and tightening financial conditions, which increase borrowing costs and reduce fiscal space[2][4]. Financial constraints can lead to financial distress if a company struggles to service its debt, potentially resulting in bankruptcy[3]. Countries facing high debt levels often experience debt service burdens that divert resources away from sustainable development goals, creating a vicious cycle of debt and constrained investment[2][4]. Addressing these constraints requires strategic financial management and access to affordable financing options to support sustainable investments and economic resilience.