Mumbai, June 12 -- The World Bank has stated that rising government debt poses a key challenge for emerging market and developing economies (EMDEs), as it leads to higher interest rates, higher debt-service payments, and a greater likelihood of debt distress. It finds that debt levels are positively associated with dollar-denominated sovereign bond spreads and domestic-currency government bond yields. The estimated relationship with debt is non-linear: the increases in spreads or yields associated with increases in debt-to-GDP ratios are greater the higher the debt-to-GDP ratio. The rise in EMDE debt-to-GDP ratios since 2010 is associated with increases in sovereign spreads and domestic-currency yields of about 110 and 30 basis points, re...