IMF, World Bank continue discussion on Debt crisis, gap in affordable climate finance
The International Monetary Fund and World Bank Group’s Spring Meetings 2023 took place from April 10-16, 2023 in Washington DC, the United States.
Issues of international concern, like the debt crisis, rising inflation, climate and development, poverty eradication and slowing economic growth, were discussed at the meetings.
The meetings brought together the World Bank and IMF board of governors, Parliament members and finance ministers from different countries, central bankers, academics and civil society organisation representatives. Here are some key talking points from the discussions:
The international debt crisis was high on the agenda this year. The pandemic, rising inflation and the Russia-Ukraine war have resulted in many developing countries facing high debt burdens. This negatively impacts the fiscal space available to countries to invest in climate mitigation and adaptation projects.
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The Global Sovereign Debt Roundtable (GSDR) was co-chaired by the IMF, World Bank and India as the Group of Twenty (G20) 2023 presidency.
GSDR met with bilateral creditors (France — chair of the Paris Club, US, the United Kingdom, China, Saudi Arabia and Japan) and debtor countries (Ecuador, Suriname, Zambia, Sri Lanka, Ethiopia and Ghana), Brazil as the forthcoming presidency of the G20 in 2024 and representatives from the private sector on April 12.
They discussed debt sustainability and ways to address debt restructuring challenges. ‘Debt Restructuring’ refers to the process by which countries, private companies or individuals can change the terms of their loans so that it is easier for the debtor to pay back the loan.
A key topic was improving and accelerating the debt restructuring process, including the G20 Common Framework.
Participants at the roundtable agreed on the urgent need to improve information sharing about the debt sustainability analysis and macroeconomic projections at an early stage in the debt restructuring process.
