The International Monetary Fund (IMF) has a responsibility to help poorer nations struggling with rising debt, high inflation and price shocks caused by war spillovers, the head of the global lender says.
Speaking as the IMF’s annual meetings in Bangkok wrapped up on Saturday, Managing Director Kristalina Georgieva said discussions with global policymakers showed both “optimism and worry”. Aljazeera reported.
Optimism from the resilience of the global economy, the promise of AI, the dynamism of Asia,” Georgieva told reporters. “But AI is also recognised to be a source of worry and so are inflation, high levels of debt, wars, climate risks.”
Georgieva said vulnerable nations are missing out on the AI investment boom that is driving growth in richer countries while at the same time dealing with higher borrowing costs.
Higher global interest rates mean low-income countries now spend 8 to 14 percent of their revenue on debt repayments, up from previous years, she said.
“I can tell you that people everywhere, but especially in poorer countries, don’t like inflation. Inflation is like a tax on the poor,” Georgieva said.
The warnings came as low-income, oil-importing countries take the strongest hit from rising global energy costs. Prices have soared since February when the United States and Israel launched a war on Iran, leading to retaliatory strikes in the Middle East and disrupted oil and gas flows.
“Escalating conflicts and trade tensions could further disrupt critical trade routes, exacerbate commodity price pressures, including in refined energy products, and worsen energy and food security,” said a statement issued by Saudi Finance Minister Mohammed Al-Jadaan, the chairman of the International Monetary and Financial Committee (IMFC).
