The International Monetary Fund (IMF) emphasized the importance of tackling challenges faced by low-income countries struggling with unsustainable debt burdens. IMF Managing Director Kristalina Georgieva noted that recent reports from the IMF and the World Bank underscored the difficulties faced by low-income developing countries, which continue to grapple with the aftermath of the COVID-19 pandemic and other shocks. The IMF revised its 2024 growth forecast for low-income countries to 4.7% from 4.9% due to these challenges.
The IMF is reinforcing its ability to support low-income countries through measures such as a 50% quota share increase and additional resources for its Poverty Reduction and Growth Trust. Additionally, the Global Sovereign Debt Roundtable hosted by the IMF and the World Bank made progress on setting timelines for debt restructurings and ensuring comparability of treatment for various creditors. High debt levels and rising interest rates pose significant burdens on low-income countries, with debt payments consuming a significant portion of revenues. These countries must increase domestic revenues, fight inflation, and improve their appeal to investors to address the challenges they face.