The managing director of International Monetary Fund (IMF), Kristalina Georgievastated this Wednesday that the world economy has resisted crises better than expected, but warned that low-income countries have done worse than expected.
«The world economy is better today than we feared a year ago, growth is being maintained, inflation is falling and the expectation that we will overcome this stage of high inflation without recession, the so-called soft landing, will also translate into better conditions for low-income countriesGeorgieva noted.
However, he added, the impact of the pandemic and other ‘shocks’ such as the war in Ukraine “is felt more deeply” in poor countries.
“Our analyzes show that fear of shocks in advanced and emerging market economies is less than we feared, but fear in low-income countries is greater than we expected.”he explained.
Goergieva participated this Wednesday together with the president of the world Bank, Ajay Bangaat a forum in Washington to discuss what low-income countries can do to foster macroeconomic stability, promote sustainable and inclusive growth, and unlock progress toward the sustainable development goals.
According to Georgieva, the Gross Domestic Product (GDP) of low-income countries is today 10% below what was projected before the pandemic and the majority have “high levels of debt”, which consume “13% of GDP.” .
“What worries me especially is that since growth is slow, their chances of catching up actually get worse.”pointed out the director.
In Banga’s opinion, we must not forget that paying the debt translates into postponing improvements in “health and education”, for example.
“In fact, several of them are spending more on paying off their debt than they will ever be able to spend on healthcare and education and that just tells you how challenging their own circumstances are.”he explained.
The IMF and the World Bank hold their spring meetings the week of April 15 in which the challenges of low-income countries will be one of the central topics.
«I think that during the next few years it will be the moment in our history in which the IMF is going to focus more its attention and its programs on the group of low-income countries»he explained.
And in the next four years, he explained, “low-income countries would need 814 billion” in international support.
“Obviously, it cannot just be financing from our institutions and a large part has to come from private sector investments at the national and international level,” he said. EFE (I)
