IMF must be more active on debt restructurings, Georgieva says
WASHINGTON: The International Monetary Fund must be more active in debt restructuring processes, the global lender's managing director, Kristalina Georgieva, said on Tuesday, noting the growing challenges facing vulnerable low- and middle-income countries.
Georgieva told an event hosted by the Bretton Woods Committee booster group that African countries and others, in a 1-1/2-hour meeting, said they wanted the IMF to provide more technical assistance to countries grappling with high debt levels.
She said the Global Sovereign Debt Roundtable, which includes creditor and borrowing countries as well as the IMF and the World Bank, had separately approved a new playbook to help countries navigate the complex process of restructuring heavy debt burdens.
The roundtable will release the document after a closed-door meeting in Washington on Wednesday during the spring meetings of the IMF and the World Bank.
A joint statement released by Georgieva and Hervé Ndoba, chair of the African Caucus and Central African Republic's minister of finance and budget, said Africa faces the risk of further shocks that could undo strong policy actions taken to bring down inflation, stabilize public debt and reduce external imbalances.
'While growth in Africa is showing some resilience in the face of multiple shocks, the sudden shift in the global outlook has interrupted the growth momentum,' the two leaders said, noting that growth on the African continent had been revised down by 0.3 percentage point to 3.9 percent for 2025.
African leaders and the IMF agreed on the need to ensure macroeconomic and financial stability while working to meet the continent's economic development goals. They said domestic reform efforts should promote fiscal sustainability by boosting revenue and improving spending efficiency.
'Now, more than ever, the Fund is committed to working with its member countries to help navigate the complex global economic environment,' the joint statement said, noting that addition of a 25th chair on the Executive Board for sub-Saharan Africa strengthened the region's voice in the fund.
The statement also pledged that the IMF would 'remain agile' in responding to emerging challenges, and providing support to initiatives like the G20 Common Framework and the Global Sovereign Debt Roundtable.
It welcomed IMF steps to review both its debt sustainability framework for low-income countries and the design and conditionality of lending programs with an eye to addressing macroeconomic imbalances and promoting growth.
The African Consultative Group includes governors from 12 African countries belonging to the African Caucus and IMF management.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Arab News
2 days ago
- Arab News
Under new World Bank threshold, over 44% Pakistanis now live below poverty line
ISLAMABAD: Around 44.7% of Pakistan's population is now considered to be living below the poverty line, according to the World Bank's newly updated global poverty threshold set at $4.20 per person per day and released this week. Christina Wieser, senior economist at the World Bank and Tobias Haque, lead country economist for World Bank Pakistan, told media on Thursday the Bank was updating its global poverty lines to reflect changes in the cost of living and consumption habits of people around the world based on newly available data. As price levels and the cost of basic needs across the world and within income groups evolve, global poverty lines are periodically updated to allow for global comparisons, Wieser said. The new poverty lines are $3 per person per day for low-income countries (LIC), $4.20 for lower-middle-income countries (LMIC) and $8.30 for upper-middle-income countries (UMIC.) Pakistan, with a population of over 240 million, is considered a lower-middle-income nation. 'The revisions help position Pakistan's poverty levels in a global context and underscore the importance of continued efforts to reduce vulnerability and improve resilience,' World Bank Country Director for Pakistan Najy Benhassine told media. 'The new figures reflect updated international thresholds and improved data from other countries, not a deterioration in living standards.' As a lower-middle-income country, Pakistan's new poverty statistics reveal that the extreme poverty line, now at $3 per person per day, applies to 16.5% of its population, a substantial increase from 4.9% under the previous $2.15 benchmark. The upper-middle-income poverty line, established at $8.30 per person per day, applies to 88.4% of the country's population. As per the new poverty threshold, more than 107.95 million people in Pakistan are living below the poverty line, earning less than Rs1,200 a day, while more than 39.8 million people are included in the extreme poverty category. The updated figures are part of the World Bank's Global Poverty June Update 2025, an initiative aimed at enhancing the precision and relevance of global poverty assessments.
Asharq Al-Awsat
2 days ago
- Asharq Al-Awsat
IMF Sees 'Some Progress' on Lebanon Reforms, But Says External Support Needed
Lebanon has made progress on reforms needed to revive its economy but still has key steps to take and will need external funding on concessional terms, the International Monetary Fund (IMF) said on Thursday after a week of meetings in Beirut. Lebanon's economy went into a tailspin in late 2019, prompted by decades of profligate spending by the country's ruling elite. Reforms required to access IMF funding were repeatedly derailed by political and private interests, according to Reuters. Lebanon's President Joseph Aoun and Prime Minister Nawaf Salam, both of whom took office in early 2025, pledged to prioritize reforms and secure an IMF financing agreement - but the country now faces additional needs with the widespread destruction and displacement caused by Israel's military campaign last year. 'The authorities have made some progress recently, including the amendment of the Bank Secrecy Law and submission of a new bank resolution law to Parliament,' the IMF's Lebanon mission chief Ramirez Rigo said in a written statement. Rigo added that his mission held 'productive discussions' with Lebanese officials, including on restoring the viability of the banking sector, fiscal and debt sustainability and enhancing anti-money laundering and terrorism financing measures. He said Lebanon's medium-term fiscal framework should support the restructuring of Eurobond debts, which Lebanon defaulted on in 2020, leading to a sovereign default on its $31 billion of outstanding international bonds. 'Given Lebanon's substantial reconstruction needs, limited fiscal space and lack of capacity to borrow, the country will require significant support from external partners on highly concessional terms,' the IMF statement said. The World Bank estimated Lebanon's recovery and reconstruction needs following Israel's military campaign at $11 billion. But the US has said it opposes any reconstruction funds to Lebanon until Hezbollah - the Iran-backed Lebanese armed group that fought Israel last year - is disarmed.
Arab News
3 days ago
- Arab News
Remittances from Egyptians abroad surge over 80%, reaching $26.4bn
RIYADH: Remittances from Egyptians working overseas recorded a significant jump during the first nine months of the 2024/2025 fiscal year, reaching an unprecedented $26.4 billion. This marks an 82.7 percent annual increase compared to the $14.4 billion recorded in the same period of the previous financial year, according to data from the country's central bank. The surge was especially pronounced in the third quarter, from January to March, when remittances saw an annual climb of 86.6 percent to about $9.4 billion, up from $5 billion in the previous year. On a monthly basis, March saw inflows of approximately $3.4 billion, reflecting a 63.7 percent increase compared to the $2.1 billion registered in the same month of 2024. The rise in remittances reflects broader improvements in the country's external financial position, indicating growing trust from Egyptians abroad and helping to ease pressure on foreign currency reserves. It also highlights the impact of recent government and central bank measures aimed at stabilizing the exchange rate and encouraging the flow of foreign currency through formal channels. Net international reserves rose to $48.5 billion at the end of May, up from $47.8 billion in March, indicating stronger foreign currency inflows and improved liquidity. Egypt's foreign currency position has been further supported by ongoing economic reforms implemented under an International Monetary Fund-backed stabilization program. Prime Minister Mostafa Madbouly reported in May that Egypt achieved real gross domestic product growth of 3.9 percent during the first half of the fiscal year, while private sector investment rose by 80 percent and foreign direct investment increased by approximately 17 percent. Non-oil exports also grew by around 33 percent in the first nine months of the fiscal year, reflecting stronger activity in the industrial, tourism, and technology sectors. Moody's affirmed Egypt's Caa1 long-term foreign and local currency ratings with a positive outlook in February, citing improved debt service prospects, higher foreign reserves, and falling borrowing costs. The government reported a drop in the general budget deficit to 6.5 percent over the past 10 months and aims to reduce debt to 85 percent of GDP by the end of June, down from 96 percent the previous year. However, inflationary pressures have re-emerged. Monthly urban headline consumer price index inflation rose to 1.9 percent in May, up from 1.3 percent in April and compared to a contraction of 0.7 percent in May 2024. On an annual basis, urban inflation reached 16.8 percent in May, up from 13.9 percent in April. Core inflation followed a similar trajectory, rising to 13.1 percent year-on-year in May from 10.4 percent the previous month.
