Speaking at a forum sponsored by the Devex development media group in Washington, prior to the upcoming meeting of G20 finance ministers next weekend in Bali, Indonesia, IMF Managing Director Kristalina Georgieva warned of an impending debt crisis among developing nations, due to higher interest rates imposed in advanced nations to try to control inflation. Higher rates mean higher debt-servicing costs. Nations that have to pay their debt in dollars but don’t earn dollars will be in a particularly difficult situation.
“There is a growing risk of a debt crisis. I want to spell it out as clearly as I can, and I will do that in the next days over there” at the G20 ministers’ meeting in Indonesia, Georgieva said. “Why? Because the level of debt has gone up during the pandemic, financial conditions are tightening — more expensive to service it.”
