About 60% of low-income countries are now in debt distress or at imminent risk of becoming so, according to the IMF.
The managing director of the International Monetary Fund, Kristalina Georgievasaid on Thursday that the global economy has been remarkably resilient to multiple shocks, but has yet to overcome a combination of weak growth and persistent inflation.
The IMF’s 2.8% global growth forecasts “are not enough to provide opportunities for businesses and citizens around the world, and what is most worrisome is the projection of weak growth over a longer period of time,” Georgieva said at a press conference at the spring meetings of the IMF and the World Bank.
For the organization, countries must worry about the high levels of debt, which, within five years, will reach almost record levels, which would limit their ability to respond to future crises.
The Fund forecasts that the world’s debt-to-GDP ratio will rise to 99.6% by 2028, almost the same level as in 2020, when governments assumed the largest increase in collective debt since World War II to alleviate the economic damage caused by covid-19. The US and China are responsible for almost all of that forecast increase, the IMF said, leading to largely from interest rate hikes and the impact of a stronger dollar. About 60% of low-income countries are now in debt distress or at imminent risk of becoming so, according to the IMF.
Lula Da Silva’s criticism of the IMF
The President of Brazil, Luiz Inacio Lula da Silvatoday lashed out at International Monetary Fund for “suffocating” the Argentine economy as a result of the demands required to comply with foreign debt obligations, during a speech at the New Development Bank, the development bank of the Brics (Brazil, Russia, India, China and South Africa).
“You cannot be suffocating countries as Argentina is doing now with the IMF and as they did with Brazil and other countries”assured Lula when celebrating the assumption of former president Dilma Rousseff at the head of the NDB.
“No ruler can govern with a knife to his throat because the country is a debtor. The multilateral banks should put tolerance in each renewal of agreements. The dream of creating the Brics was to create a development instrument,” Lula said. at the headquarters of the Global South Development Bank, located in Shanghai. on the first day of his China tour.
In addition, he criticized the way in which the countries got into debt just to cover the financial account and not allocate loans from the IMF or private banks to motorize development or infrastructure.
Source: Ambito
