International Monetary Fund head Kristalina Georgieva warned of a global debt crisis as the world’s largest central banks raise interest rates to curb inflation, adding to the debt-servicing burden of poorly financed countries.
“What we are seeing now is crisis after crisis and the possibility of a third global financial shock after the pandemic (coronavirus pandemic) and war (Russians in Ukraine),” President Georgieva said during her participation in a conference in the US capital of Washington.
She pointed out that high world prices have prompted central banks to increase interest rates at a rapid pace. In the United States, Federal Reserve officials are focused on aggressively raising interest rates to stem the worst wave of inflation in four decades that has pushed the dollar higher.
At the same time, developing countries have amassed more than a quarter of a trillion dollars in loans in recent years, threatening to plunge these countries into a series of historic bankruptcies.
The head of the IMF pointed out that “countries that do not have dollar incomes but are forced to service their debts face a double difficulty in dealing with the crisis,” adding that “about 30 percent of developing and developing countries are either suffering from a debt crisis or close to it. “.
Source: El Nashra