China · Nation Thailand
IMF Chief warns rising bond yields could erase developing nations’ gains
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Rising bond yields in advanced economies threaten to reverse hard-won progress by developing and low-income countries in bringing their debts under control, International Monetary Fund Managing Director Kristalina Georgieva has warned.
Key facts
- Speaking in an interview on Tuesday on the sidelines of a G20 finance leaders’ meeting in North Carolina, Georgieva said yields were being driven higher by expanding debt, persistent inflationary pressure linked to the continued closure of
- The IMF estimated in 2022 that 60% of low-income countries were experiencing debt distress or faced a high risk of it.
- During the G20 session, the IMF announced a staff-level agreement on a three-year financing programme worth approximately US$2.2 billion, conditional on Senegal seeking debt treatment.
- The framework was launched in November 2020 during the Covid-19 pandemic to bring official and private creditors together in restructuring the debts of crisis-hit countries .
- The proposed 36-month Extended Credit Facility arrangement is intended to support Senegal’s economic and financial reform programme for 2026–2029.
Summary
Speaking in an interview on Tuesday on the sidelines of a G20 finance leaders’ meeting in North Carolina, Georgieva said yields were being driven higher by expanding debt, persistent inflationary pressure linked to the continued closure of the Strait of Hormuz and competition for capital from artificial intelligence-related borrowing.
She stressed that the threat extended beyond low-income countries. Heavy debt in advanced economies, combined with stubborn inflation, could raise servicing costs for borrowers worldwide, including emerging markets and developing economies.