About a quarter of emerging market nations and more than 60% of low-income countries are experiencing challenges due to their national debt levels, according to Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF).
Speaking at an event held by the Center for Global Development on Tuesday, Georgieva stated that over 16 states had requested assistance from the IMF for an amount totalling $90 billion.
Furthermore, since public debt has grown in the meantime, the finances of an increasing number of emerging markets and low-income countries also find themselves under strain.
“If we look at the situation of emerging countries, most are doing well because they have invested in currency reserves and are carrying out macroeconomic reforms,” Georgieva explained, “but 25% of them are in difficulty or are close to it.”
Even more concerning is the situation in low-income nations, where it is estimated that more than 60% are experiencing serious economic difficulties.
As a result, the IMF plans to increase its support measured and has urged private and public creditors, particularly China, to “prevent these challenges from exploding.”
The IMF has been often criticised for handing out loans to developing countries and imposing conditionalities in politically contentious areas, such as public-sector wage cuts or private-sector reform.