Written by Amani Nilar
09 Sep, 2022 | 9:30 pm
COLOMBO (News 1st); The Chief of International Monetary Fund (IMF), Kristalina Georgieva urged for large creditor nations such as China to show leadership and move rapidly to enable debt relief to countries such as Sri Lanka.
Speaking to CNBC during her visit India, the IMF Chief said that about 25% of emerging market economies in distress, and Sri Lanka has been such a case for a long time.
Pointing out that over 60% of low-income countries are at distress due to this, and even middle-income countries with strong fundamentals have fallen into a dire situation.
What happened to these countries was that the frequency of shocks they faced increased, the IMF Chief said; "shock, upon shock, upon shock. Even countries with strong fundamentals, are becoming vulnerable," she said.
Therefore, the lesson which should be learned is prudent fiscal policies, sound buffers and building resilience to shocks, Georgieva said.
Referring to countries such as Malawi, IMF Chief Georgieva said that the country is experiencing a food shortage, a fuel shortage, and a debt crisis, which makes the entry of IMF even harder.
"My message to the creditors, especially large creditors such sa China; 57% of loans to low-income countries is from China, or the private sector, which is even a bigger creditor, is that you have done a needy job to provide financial resources for growth, that is not necessarily bad. But in the environment of these shocks, show leadership, and move forward quickly to provide debt relief to these countries so that they can step up on their feet," she added.
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