International Monetary Fund head Kristalina Georgieva said on Thursday that the poorest countries need much more concessional financing, adding that the international finance organisation is aiming to triple its concessional lending and it is urgently seeking $17 billion in new loan resources for its poverty reduction and growth trust.
She added that poorest countries also need at least $1.8 billion in subsidy resources.
Georgieva’s comments were made during a speech on Thursday, part of the IMF and World Bank’s spring meetings, which conclude on Friday.
She also warned that more lending may not always be the best solution, as the crisis is adding to high debt burdens, and many countries could find themselves on an unsustainable path.
New approaches are therefore needed, she said, including working closely with other international institutions and fora, as well as the private sector.
She also stressed that the global outlook is dire, adding that global economic activity is expected to decline on a scale that has not been seen since the Great Depression.
“This year 170 countries will see income per capita go down. Only months ago we were projecting 160 economies to register positive per capita income growth. This is an unprecedented crisis that calls for a comprehensive approach by our institution,” said Georgieva.
In related news, the International Monetary and Financial Committee (IMFC), which provides advice to the IMF, said in a statement that, while the global outlook is subject to exceptionally high uncertainty, a recovery is expected over 2021 due to employing all available policy tools by international institutions to defeat the pandemic, protect jobs, and restore growth.
Targeted and sizeable fiscal support is critical to provide a safety net for the most affected households and businesses and create conditions for a rapid recovery, according the statement.