IMF urges members to boost funds for low-income states

• IMF chief Kristalina Georgieva warned of a widening gap between advanced and developing economies.
• She urged member states to increase funding for the Poverty Reduction and Growth Trust.
• The IMF is also seeking replenishment for the Catastrophe Containment and Relief Trust.
• Average debt service costs for developing countries have risen to 14% of revenue from 6% a decade ago.
• The IMF forecasts global growth at 3.1% for 2026, with slower growth expected for developing economies.
• Developing countries are paying $500 billion more for debt than developed nations, according to Nigerian Finance Minister Taiwo Oyedele.

International Monetary Fund chief Kristalina Georgieva warned on Wednesday that current economic trends and the rapid advancement of artificial intelligence risk deepening the divide between advanced and developing economies. Speaking at the IMF and World Bank annual meetings in Bangkok, Georgieva urged member states to fulfill their pledges to increase funding for the Poverty Reduction and Growth Trust, which provides low- and zero-interest loans to low-income countries.

The IMF is also seeking replenishment for the Catastrophe Containment and Relief Trust, a specialized fund that offers grants for debt-service relief and cancellation to the poorest and most vulnerable member countries. Georgieva noted that higher benchmark yields in advanced economies are spilling over to emerging markets and low-income countries, leading to increased debt service costs.

Average debt service costs have risen to 14% of revenue from 6% a decade ago, even as overall debt burdens have eased, she said. The IMF forecasts global growth at 3.1% for 2026, with nearly all developing economies expected to see slower growth. Officials from developing countries are warning that these rising debt service costs pose a major barrier to inclusive growth. Taiwo Oyedele, Nigerian Finance Minister and chair of the Group of 24 developing nations, stated that developing countries are paying $500 billion more for their debt than developed countries, despite facing widening budget deficits.

Georgieva expressed optimism about Senegal's debt restructuring process under the G20 Common Framework and noted the IMF's staff-level agreement on a $2.2 billion lending program for the West African nation.