The International Monetary Fund (IMF) Managing Director, Kristalina Georgieva, said on Monday (September 11) that the debt problem is very concerning in an interview with CNBC. However, she also pointed out that COVID and the Russia-Ukraine war made the world learn to diversify supply chains.
Georgieva stressed that 25 percent of the world's emerging markets’ debt is treading in distressed territory. Also, more than half of the low income countries are either in debt distress or close to debt distress.
Georgieva said that debt problem across the world is very pressing and the world needs to act on it. She added that the Global Sovereign Debt Roundtable, co-chaired by India along with the IMF and the World Bank, made remarkable progress on identifying and preparing concerns of different lenders and borrowing countries. She stressed that the supply chain needs to be reinforced and diversified as connectivity matters tremendously.
“Today there is fragmentation in our world. For the first time, global trade grows slower than the global economy – 2 percent trade, 3 percent global growth. If we want trade to again become an engine of growth then we must create corridors and opportunities,” she said.
Additionally, Georgieva said that the Indian presidency has put a lot of efforts into specifics on the declaration issued on the first day of the G20 Summit. She added that the acceptance of the African Union by the G20 will provide a voice to the entire continent.
She also praised Indian presidency for the attention paid on accelerating action on climate change at the G20 Summit.
“The Indian presidency delivered the pledges for a $100 billion on SDR (Special Drawing Rights) lending that were made during the Italian presidency… we are slightly exceeding this $100 billion. That means more concession of financing for low income countries, more concession of financing for vulnerable middle income countries, ” added Georgieva.
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