The International Monetary Fund (IMF) is working very hard to press for urgent debt resolution for countries like Chad, Ethiopia, Zambia, Ghana, Lebanon, Suriname and Sri Lanka, IMF Managing Director Kristalina Georgieva said.
She said the IMF is engaging with the traditional creditors, such as the Paris Club, and the non-traditional creditors such as China, India and Saudi Arabia to resolve the debt issue of those countries.
She underlined that the IMF’s call is to act urgently. The IMF Chief made the above comments on Sunday during a CBS news programme “Face the Nation with Margaret Brennan”.
She noted that the countries that are in distress as a result of the debt borrowed in dollars are not so far systemically significant to trigger a debt crisis in the world.
“The risk of contagion is not as ‘high’. However, 25 percent of the emerging markets are now trading in distressed territory. Then the world economy may be in for a bad surprise,” she remarked.The IMF Managing Director highlighted that one-third of the world’s economies are expected to be in recession this year.
“For most of the world economies, this is going to be a tough year, tougher than the year we left behind. Why? Because three big economies, the US, the EU and China are all slowing down simultaneously. That translates into negative trends globally,” she explained.
“When we look at the emerging markets in the developing countries, the picture is even direr. On top of everything else, they get hit by high interest rates and the appreciation of the Dollar. The economies that already have high levels of those, this is devastation,” she added.
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