IMF chief urges members to honour funding pledges for low-income nations
IMF Managing Director Kristalina Georgieva urged member countries to deliver on funding commitments for the Poverty Reduction and Growth Trust, warning that economic pressures and rapid AI development could widen the gap between advanced and developing economies. She also called for fresh contributi
The head of the International Monetary Fund has called on member countries to honour their funding commitments to support low-income nations, warning that current economic conditions and the rapid rise of artificial intelligence could widen the divide between advanced and developing economies.
Speaking at a press conference during the IMF and World Bank annual meetings in Bangkok, Managing Director Kristalina Georgieva said the IMF had a responsibility to provide financial support to countries when needed. She urged members to increase contributions to the Poverty Reduction and Growth Trust, a concessional lending facility for the poorest countries.
Georgieva noted that rising benchmark yields in advanced economies were affecting emerging markets and low-income countries. Although some economies had seen their overall debt burdens ease, debt-servicing costs as a share of government revenue had risen from 6 per cent to 14 per cent over the past decade, she said. Higher energy and food costs, reduced development assistance, and weaker appetite for riskier investments were putting significant pressure on many nations.
The IMF had reformed the PRGT to triple its lending capacity, Georgieva said, but member countries needed to deliver on their pledges. She also appealed for fresh funding for the Catastrophe Containment and Relief Trust, which she said had been used frequently in recent years and required urgent replenishment.
Georgieva criticised advanced economies, including the United States, for failing to rebuild fiscal buffers after the Covid-19 pandemic, describing them as the worst performers. By contrast, many developing countries had strengthened institutions to improve their resilience to shocks, she said.
Turning to the United States, Georgieva said its total public debt had exceeded 40 trillion US dollars and could not be reduced through economic growth alone, adding that other fiscal measures were needed.