Possible “economic collapse” in some low-income countries unless creditors in the world’s richest nations suspend debt-service obligations and help renegotiate new terms.
IMF Managing Director Kristalina Georgieva and Ceyla Pazarbasioglu, head of the fund’s strategy, policy, and review department, said About 60% of the world’s poorest countries are at high risk or are already in debt distress, double the share in 2015.
IMF officials said. With the Group of 20’s debt-service suspension initiative expiring at the end of the year and interest rates poised to rise, “low-income countries will find it increasingly difficult to service their debts,”
“We may see economic collapse in some countries unless G-20 creditors agree to accelerate debt restructurings and suspend debt service while the restructurings are being negotiated.”
Covid-19 has dealt a major blow to world’s poorest countries, causing a recession that could push more than 100 million people into extreme poverty, according to the World Bank. The challenges are mounting with the discovery of the omicron variant, which is driving a new wave of infections.
according to the World Bank’s website, Afghanistan and Ethiopia are among the 30 nations at high risk of overall debt distress while Grenada, Mozambique, Republic of Congo, Sao Tome and Principe and Somalia are already experiencing it.
