The International Monetary Fund is pushing China and other Group of 20 economies to accelerate debt relief for a growing number of heavily indebted countries, warning that failure to do so could trigger a damaging “downward spiral”.
The fund’s chief executive, Kristalina Georgieva, told Reuters it was crucial to relaunch the largely stalled common framework for debt treatment that was adopted by the G20 and the Paris Club of official creditors in October 2020, but has so far not provided a single result.
“This is a subject on which we cannot rest on our laurels,” she said. “If confidence is eroded to the point where there’s a downward spiral, you don’t know where it would end,” the head of the International Monetary Fund said in an interview late last week ahead of this meeting. finance managers week in Indonesia. .
Georgieva said she spoke with Indonesian President Joko Widodo, who holds the rotating G20 presidency this year, at the Group of Seven meeting last month in Germany and urged him to press for a greater unity on debt ahead of the G20 leaders’ summit in November.
“G20 leaders don’t want to be in a situation where this issue dominates the conversation just because we’re not making progress,” Georgieva said.