IMF, World Bank chiefs warn of debt squeeze in poor nations
2 years, 8 months ago

IMF, World Bank chiefs warn of debt squeeze in poor nations

Associated Press  

WASHINGTON — The heads of the International Monetary Fund and the World Bank warned Wednesday that rising interest rates are squeezing the world’s poorest countries as they struggle with the coronavirus and soaring food prices. There is “a huge buildup of debt, especially in the poorest countries,’' World Bank President David Malpass said in a press conference. “As interest rates rise, the debt pressures are mounting on developing countries, and we need to move urgently towards solutions.‘’ Malpass said the “debt crisis’’ is a topic of extensive discussion’ at this week’s Spring meetings of the World Bank and IMF, already dominated by other daunting issues including the war in Ukraine, the coronavirus pandemic and a slowing global economy. IMF managing director Kristalina Georgieva told reporters Wednesday that 60% of low-income countries were in or near “debt distress’’ — an alarming threshold reached when their debt payments equal half the size of their national economies.

World Bank Debt Interest Rates Developing Developing Countries World Bank Poor Countries Imf Malpass  world  developing  rates  debt  food  economies  nations  chiefs  prices  squeeze  poorest  bank  countries  warn  imf  poor

History of this topic

How Trump, Starmer and Macron can avoid a debt crunch
4 weeks, 1 day ago

How Trump, Starmer and Macron can avoid a debt crunch

Live Mint  

America’s gross national debt is $36trn, or $107,000 per person. In rich countries, government bonds are as close as they can get to a “risk free" asset, making them less likely than foreign ones to stage a “buyers’ strike". Although it might seem that rich countries would balk at such measures, a paper in 2015 by Ms Reinhart found that …

The UN says global public debt hit a record $97 trillion in 2023. Developing countries are hard hit
6 months, 2 weeks ago

The UN says global public debt hit a record $97 trillion in 2023. Developing countries are hard hit

Associated Press  

GENEVA — Global public debt rose to a record $97 trillion last year, the United Nations reported Tuesday, with developing countries owing roughly one-third of that — crimping their ability to pay for basic government services like health care, education and climate action. In 2023, public debt in developing countries hit $29 trillion, or about 30% of the total worldwide …

Sobering assessment: On the IMF forecast, World Bank report
8 months ago

Sobering assessment: On the IMF forecast, World Bank report

The Hindu  

The global economy has avoided the spectre of a debilitating recession, with the IMF last week raising its forecast for worldwide aggregate growth in 2024 to 3.2%, from the 2.9% it had projected in October. The IMF has underlined the fact that the global economy has, with surprising resilience, ridden out several adverse shocks as well as ‘significant central bank …

Debt, fiscal challenges facing low-income countries worry IMF
8 months ago

Debt, fiscal challenges facing low-income countries worry IMF

The Hindu  

Shareholders of the International Monetary Fund agreed on the importance of addressing challenges faced by low-income countries, many of which are facing unsustainable debt burdens, IMF Managing Director Kristalina Georgieva said on April 19. Impact of high debt levels on low-income countries Ms. Georgieva, in a meeting of the Global Sovereign Debt Roundtable hosted by the IMF and the World …

Why the G-20 ‘Common Framework’ for Debt Relief Isn’t Helping Poor Nations
8 months, 2 weeks ago

Why the G-20 ‘Common Framework’ for Debt Relief Isn’t Helping Poor Nations

Bloomberg  

More than half of the world’s low-income countries are at high risk of debt distress or are already in it, and several have defaulted. But despite the world’s 20 largest economies having agreed in 2020 to a plan called the Common Framework to smooth the process of restructuring loans that governments could no longer afford to service or repay, progress …

Global debt surges to record high as borrowing costs bite
10 months ago

Global debt surges to record high as borrowing costs bite

The Telegraph  

Global debt has surged to a record high of $313 trillion, as higher interest rates drive up borrowing costs for companies and governments worldwide. Jan Friederich at Fitch Ratings said higher borrowing costs mark “a quite substantial change from the environment of. Speaking at the launch of the IIF’s Global Debt Monitor he said that “average interest expenditure relative to …

The world should stay vigilant over a debt crisis in the Global South
11 months, 3 weeks ago

The world should stay vigilant over a debt crisis in the Global South

Live Mint  

The International Economic Association recently concluded its 20th World Congress in Medellín, Colombia. Building on earlier studies by Jean-Marie Grether and Nicole A. Mathys, as well as his own previous research, Quah illustrated the world economy’s shifting centre of gravity, which he defines as the “average location of economic activity across geographies." Unlike the Great Recession of 2008-09, which was …

How a plan to end poor countries’ debt crises created a new one
1 year ago

How a plan to end poor countries’ debt crises created a new one

Live Mint  

A plan to prevent another developing-country debt crisis is now at the root of the latest financial troubles destabilizing economies from Ghana to Sri Lanka and Pakistan. In Pakistan, interest payments on local-currency debt are expected to eat up more than half the government’s revenue this year, seven times what it will spend on its dollar debt. In a series …

Why the world is drowning in debt – again
1 year, 1 month ago

Why the world is drowning in debt – again

The Telegraph  

Emre Tiftik, a director at the IIF, believes countries have become addicted to debt. And there’s this omnipotent feeling that central banks and governments can manage all of this stuff I’m cautious.” Mohamed El-Erian, chief economic adviser at Allianz, says the debt reckoning will not hit countries equally. “While debt burdens are rising in most countries around the world, the …

Global debt surges to record $307 trillion amid borrowing binge
1 year, 3 months ago

Global debt surges to record $307 trillion amid borrowing binge

The Telegraph  

Global debt has surged to a fresh record of $307 trillion as governments and financial services companies fuel a jump in borrowing. Borrowers added $10 trillion to the debt mountain in the first half of 2023, according to the Institute of International Finance. It comes as US government debt hit a record $33 trillion this month amid heavy borrowing and …

China's great wall of debt driving ‘unsustainable’ increase in borrowing, IMF warns
1 year, 3 months ago

China's great wall of debt driving ‘unsustainable’ increase in borrowing, IMF warns

The Telegraph  

China is driving global debt back towards unsustainable levels amid an “unparalleled” borrowing binge by property developers and local governments, according to the International Monetary Fund. The IMF warned that a declining global debt share in 2022 risked being just a “pandemic blip” and said there was an urgent need to “restore fiscal sustainability”. “Global debt, which remained significantly higher …

3.3 billion people live in countries that spend more on debt interest than education, UN says
1 year, 5 months ago

3.3 billion people live in countries that spend more on debt interest than education, UN says

Associated Press  

UNITED NATIONS — Some 3.3 billion people – almost half of humanity – now live in countries that spend more money paying interest on their debts than on education or health, according to a new U.N. report released Wednesday. U.N. Secretary-General Antonio Guterres told a press conference launching the report that because this “crushing debt crisis” is concentrated mostly in …

Is a global debt bomb about to explode?
1 year, 5 months ago

Is a global debt bomb about to explode?

Al Jazeera  

The majority of low-income nations are on the cusp of a debt crisis, sparking fears of global contagion. “Every day we don’t deliver these things that are within our control, we are basically increasing the costs and the damage gets compounded.” The queue of countries seeking debt restructuring like Zambia is only growing. However, economists and debt-management experts say richer …

BRI a tool for development, not debt traps
1 year, 5 months ago

BRI a tool for development, not debt traps

China Daily  

The claims that the Belt and Road Initiative has been used as a tool to create debt traps for receptive countries are completely wrong, said Jin Keyu, associate professor of economics at the London School of Economics and Political Science. "The majority of debt in emerging markets is owed to Western institutions, multilateral institutions and financial institutions, including private creditors …

How does US debt rank compared with the rest of the world?
1 year, 6 months ago

How does US debt rank compared with the rest of the world?

Al Jazeera  

The United States has the world’s highest national debt at $31.4 trillion. Global debt currently stands at $305 trillion, $45 trillion higher than before the COVID-19 pandemic, according to the Institute of International Finance – a global association of the financial industry. The IIF predicts that global debt will continue to rise as government borrowing remains high, affected by factors …

A dilemma for dozens of countries: Fund your schools and hospitals or pay your debt
1 year, 7 months ago

A dilemma for dozens of countries: Fund your schools and hospitals or pay your debt

NPR  

A dilemma for dozens of countries: Fund your schools and hospitals or pay your debt Enlarge this image toggle caption Pius Utomi Ekpei/AFP via Getty Images Pius Utomi Ekpei/AFP via Getty Images Nigeria is now spending 96% of its government revenues to pay off the interest on its national debt. China was a particularly attractive option, says McNair, because when …

IMF chief warns of a gloomy growth scenario
1 year, 8 months ago

IMF chief warns of a gloomy growth scenario

Hindustan Times  

Delivering a gloomy warning ahead of the spring meetings of the International Monetary Fund and World Bank, \, IMF’s managing director, said on Thursday that global growth dropped by half in 2022 and it will hover around 3% for the next five years, the lowest medium-term growth forecast since 1990. International Monetary Fund Managing Director Kristalina Georgieva poses for a …

IMF head expects less than 3% global economic growth in 2023
1 year, 8 months ago

IMF head expects less than 3% global economic growth in 2023

Associated Press  

WASHINGTON — The International Monetary Fund chief said Thursday the world economy is expected to grow less than 3% this year, down from 3.4% last year, increasing the risk of hunger and poverty globally. Kristalina Georgieva said the period of slower economic activity will be prolonged, with the next five years of growth remaining around 3%, calling it “our lowest …

Risk of hunger, poverty higher due to slow economic growth: IMF
1 year, 8 months ago

Risk of hunger, poverty higher due to slow economic growth: IMF

Al Jazeera  

IMF head said persistently high interest rates, a series of bank failures in the US and Europe, and deepening geopolitical divisions are threatening global financial stability. Kristalina Georgieva said on Thursday that growth is expected to remain about 3 percent for the next five years, calling it “our lowest medium-term growth forecast since 1990”, adding that it would be a …

Ukraine war is exacerbating fragilities in the global economy: G20 Ministers
1 year, 9 months ago

Ukraine war is exacerbating fragilities in the global economy: G20 Ministers

The Hindu  

At a meeting of G20 Finance Ministers and Central Bank Governors on Saturday in Bengaluru, most members called for a “complete and unconditional withdrawal” of the Russian forces from Ukrainian territory. “Most members strongly condemned the war in Ukraine and stressed that it is causing immense human suffering and exacerbating existing fragilities in the global economy — constraining growth, increasing …

Debt load may pose threat to nations: PM
1 year, 9 months ago

Debt load may pose threat to nations: PM

Live Mint  

Prime Minister Narendra Modi cautioned on Friday that unsustainable debt levels posed a threat to the financial stability of nations and called upon G20 finance ministers and central bank governors to work towards restoring stability, confidence, and growth to the global economy. International Monetary Fund managing director Kristalina Georgieva said on Thursday that the IMF, World Bank and India’s G20 …

Poor countries feel sting of local-currency debt
2 years ago

Poor countries feel sting of local-currency debt

Live Mint  

Some of the world’s poorest economies embraced borrowing in their own currencies as a shield from painful swings in the US dollar. Debt issued by emerging-market governments and companies in their local currency reached $12.5 trillion in 2021, according to data from Bank of America that excludes China’s enormous borrowings in the yuan. The country’s finance minister said last month …

UN seeks help for developing world hit by rising debt costs
2 years, 2 months ago

UN seeks help for developing world hit by rising debt costs

Associated Press  

GENEVA — The United Nations’ development program is calling on rich countries and financial institutions in them to do more to help alleviate a growing debt crisis faced by the world’s poorest countries, including by writing off debts — not just rescheduling them. A report from UNDP released Tuesday comes amid meetings by the World Bank, International Monetary Fund and …

‘The worst is yet to come’: IMF issues stark recession warning
2 years, 2 months ago

‘The worst is yet to come’: IMF issues stark recession warning

CNN  

London CNN Business — The International Monetary Fund has once again downgraded its forecast for the global economy with a sharp warning: “The worst is yet to come, and for many people 2023 will feel like a recession.” The agency said Tuesday that it expects global growth to slump to 2.7% next year, with a 25% probability it could fall …

Bailout euphoria by IMF signals peak of pessimism in emerging markets
2 years, 3 months ago

Bailout euphoria by IMF signals peak of pessimism in emerging markets

Live Mint  

It may be too early to turn bullish on emerging markets -- but a raft of bailouts pledged by the IMF and China has some investors deciding it’s too risky to stay bearish. While some countries are still waiting, with Ukraine’s premier on Saturday criticizing slow progress from the IMF in agreeing a new assistance package for the war-torn nation, …

Developing countries stymied by rising interest rates and COVID
3 years, 3 months ago

Developing countries stymied by rising interest rates and COVID

The Hindu  

The more a country is intertwined with the global economy — whether through industry, trade or tourism — the greater the potential damage from the COVID-19 pandemic. "For emerging markets, there is then a risk of a sharp rise in the cost of capital and a flight of capital," Clemens Fuest, head of the Munich-based Ifo Institute, told DW. "Before …

World Bank, IMF to Consider Climate Change in Debt Reduction Talks
3 years, 10 months ago

World Bank, IMF to Consider Climate Change in Debt Reduction Talks

News 18  

The World Bank is working with the International Monetary Fund on ways to factor climate change into the negotiations about reducing the debt burdens of some poor countries, World Bank President David Malpass told Reuters in a Friday interview. Malpass said the Bank and the IMF were studying how to twin two global problems – the need to reduce or …

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