Washington DC – The IMF warns that rising US interest rates could impact the ability of developing countries to pay debt, leading to prolonged economic crisis. The warning comes ahead of IMF, G20 and World Bank meetings, with the Fund's release of the Global Financial Stability Report.
“All countries that defaulted over the last year were middle-income countries,” said Eric LeCompte, the Executive Director of the religious development organization Jubilee USA Network. “Unfortunately, developing middle-income countries are not included in IMF and G20 debt relief solutions."
The report warns that recovery from the pandemic will be unequal between rich and poor countries and that more needs to be done to strengthen long-term stability around the globe. This morning the IMF released the World Economic Outlook Report estimating that 95 million more people fell into extreme poverty over the last year, living on less than $1.90 a day.
"Wealthy countries invested in big stimulus packages and can rebound more quickly," said LeCompte. "Billions of people in developing countries are left behind and their lives will be even worse after the pandemic."
Read the IMF's Global Financial Stability report here.
Read Jubilee USA's release on the IMF's World Economic Outlook report here.
Read about the IMF extending a process to cancel debt payments for the world's 28 poorest countries here.