Kristalina Georgieva, the Managing Director of the International Monetary Fund (IMF), has called on China to accelerate its work in reaching debt restructuring agreements for developing nations such as Ghana, Zambia, and Ethiopia.
During a recent visit to China, she met with the new top economic official, Li Qiang, and other top Chinese officials, where she urged them to play a constructive role in resolving debt relief cases. Georgieva commended China for helping Chad and Sri Lanka reach debt relief agreements but noted that more needs to be done to help heavily indebted countries.
Georgieva also highlighted the urgent need for resolving debt crises, stating that about 60% of low-income countries are already in or at risk of debt distress, and about 25% of emerging economies are at high risk and facing “default-like” borrowing spreads. This comes as the IMF warns that rising geopolitical tensions and the fragmentation of the global economy could increase financial stability risks, reducing cross-border investments, asset prices, payment systems, and banks’ ability to lend.
Chinese officials have pledged their commitment to multilateralism, opening up China’s economy for more trade, and debt restructuring. During her visit, Georgieva noted that Chinese officials expressed concern about fragmentation but were primarily focused on creating jobs domestically, with a target of creating 12 million jobs this year.