The International Monetary Fund (IMF) will meet with nations including Egypt, Sri Lanka, and Tunisia to discuss the steps that need to be taken to assist them as the cost of debt servicing hikes due to tighter financial conditions, the institution’s chief said in an interview on Bloomberg Television on Thursday.
“The good news is that we see debt, we follow it, and we are already zeroing in on countries that are in need of debt restructuring”. “We have to press for debt restructuring.” said Kristalina Georgieva.
Georgieva highlighted that the IMF “will convene with Sri Lanka, Egypt, and Tunisia, and we will examine what realistically has to be done,” without specifying that all three countries will require debt restructuring.
According to Bloomberg data, while Sri Lanka and Tunisia are among the dozen or so emerging economies with dollar-denominated government bonds paying at least 1,000 basis points higher than US Treasuries — above the threshold for debt to be declared distressed — Egypt is not.
The IMF and World Bank Spring Meetings, to start on Monday, will bring together finance ministers and central bankers from around the world in Washington.
“Russia’s invasion of Ukraine and its consequences, including uncertainty and inflation, had prompted the IMF to decrease its 2022 gross domestic product forecast for 143 of its 190 member countries, accounting for 86 percent of global output,” Georgieva added in a speech on Thursday.
She said the IMF had reduced its 2022 gross domestic product prediction for 143 of its 190 member nations, or for 86 percent of global output, due to Russia’s invasion of Ukraine and its effects, including uncertainty and inflation.
“Some nations will require debt restructuring, with 60 per cent of low-income nations in or near debt distress.” On Sri Lanka, the nation “has appointed very prominent Sri Lankan economists to be advisers.” “That gives me hope.” Georgieva concluded.
