IMF urges support for poorer nations facing high inflation, war spillovers

IMF chief warns of debt, inflation and war spillovers threatening low-income nations

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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, according to IMF Managing Director Kristalina Georgieva.

Speaking at the IMF's annual meetings in Bangkok, Georgieva said discussions with global policymakers showed both 'optimism and worry'. She cited the resilience of the global economy, the promise of artificial intelligence (AI), and the dynamism of Asia as sources of optimism.

However, Georgieva also recognised AI as a source of worry, as well as inflation, high levels of debt, wars, and climate risks. She noted that vulnerable nations are missing out on the AI investment boom that is driving growth in richer countries.

Low-income countries are now spending 8 to 14 percent of their revenue on debt repayments, up from previous years, due to higher global interest rates. Georgieva described inflation as 'a tax on the poor', and warned that escalating conflicts and trade tensions could further disrupt critical trade routes and worsen energy and food security.

The IMF has a 'relentless pursuit of more resources for low-income countries', and Georgieva said her organisation has a responsibility to help countries restructure debt if needed to assist with domestic resource mobilisation, bring in international finance, and create conditions for private investment.

Georgieva also announced that the IMF plans to back Iraq 'very firmly' with a requested loan programme, while talks with Lebanese authorities are making progress.