The International Monetary Fund (IMF) says it is collaborating with the World Bank to increase its capacity to support low-income countries.
IMF’s Managing Director, Kristalina Georgieva, said this on Thursday in Marrakech, Morocco, at the ongoing 2023 World Bank-IMF Annual Meetings.
Ms Georgieva said that the support was under the aegis of the Poverty Reduction and Growth Trust (PRGT), which provides zero-interest rate loans to low-income countries.
She said that 40 countries are helping the Bretton Woods institutions to realise their target for the PRGT.
“I can tell you it warmed my heart when we met with contributors to see how much more expanded the family of PRGT contributors are.
“Big countries, small countries, rich countries, poorer countries coming together for the benefit of the most vulnerable in our global family,” she said.
The IMF Managing Director said that the Fund would also secure the full amount of $40 billion already pledged by donors to its new Resilience and Sustainability Trust (RST).
Big countries, small countries, rich countries, poorer countries coming together for the benefit of the most vulnerable in our global family.
She said that the RST offers financing to help the vulnerable low and middle-income countries cope with the existential threat of climate change.
“There are some encouraging signs that we will exceed $40 billion,” she said.
She said that the world is presently experiencing severe shocks that are now becoming the new normal for “a world that is weakened by weak growth and economic fragmentation.”
She, however, said that while countries like the U.S. have displayed the capacity to recover fast, some other countries still battle with the economic challenges occasioned by COVID-19 and the Russian invasion of Ukraine.
“We expect growth to remain low over the medium term, and we are faced with divergence in economic fortunes.
“Successive shocks since 2020 have pushed global output down by $3.6 trillion as of this year. This loss is unevenly distributed.
“The U.S. has already recovered to pre-pandemic levels, most of the rest of the world did not.
“Low-income countries have been hardest hit because they have had extremely limited buffers, so it was hardest for them to protect their economy; to protect their people,” she said. (NAN)