The heads of the world’s biggest international finance institutions sounded the alarm about record global debt levels, with the International Monetary Fund’s chief saying options to deal with the billions owed by poor nations are disappearing.
“We see the problem for many countries getting worse and the tools to deal with this problem are disappearing,” Kristalina Georgieva said in an online discussion with World Bank President David Malpass on Tuesday. “The debt problem is knocking on the door louder and louder.”
A plan forged by the G-20 in late 2020 to rework the debt of countries in danger of defaulting — known as the Common Framework — has been hampered by a lack of coordination, transparency and clarity. The country is seeking up to $4 billion this year to tide over problems and pay creditors amid dwindling foreign reserves and Asia’s fastest inflation. Last week, the country halted payments on foreign debt, leading to a series of downgrades of the nation’s credit rating.
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