The Jubilee Blog

IMF Forecasts Lowest Growth in Decades as World Leaders Descend on Washington for Meetings

Debt Roundtable Meetings Attempt to Break Impasse on Debt Relief From China and Private Sector

The International Monetary Fund forecasted the lowest global growth in decades as world leaders attend IMF, World Bank, G7 and G20 meetings. The IMF flagship World Economic Outlook report expects growth to fall to 2.8% this year. 

“The ongoing war and high inflation and interest rates are pushing countries into debt and food crises,” said Eric LeCompte, Executive Director of the religious development group Jubilee USA Network. LeCompte has monitored IMF and World Bank policies since 2010. “In the US and around the world more people are facing hunger because of intertwined global crises.”

High debt ratios in low- and middle-income countries as interest rates rise across the world are a concern that the report highlights. The report suggests that debt restructurings will play an important role in reducing debt.

“In the IMF's key report issued this week, they noted the need for there to be processes for debt relief that can deal with multiple countries,” shared LeCompte. "Current debt relief processes are failing to cut debt and get countries the aid they need."

As part of pandemic and financial crisis response, the G20 created a process called the Common Framework to facilitate debt restructuring for more than 70 developing countries. On Wednesday, a group of stakeholders representing the private sector and lending and borrowing countries, met in a forum called the Sovereign Debt Roundtable.

"The Sovereign Debt Roundtable is an attempt to overcome some challenges regarding participation from China and the private sector in current debt relief initiatives," noted LeCompte. "Legislation is moving in New York State, the world's financial center, that ensures the private sector participates in debt relief."

The New York Taxpayer and International Debt Crises Protection Act (S.4747, A.2970) allows developing countries to receive debt relief from the private sector. The legislation sponsored by Senator Brad Hoylman-Sigal and Assemblymember Patricia Fahy ensures the private sector participates in global debt relief agreements and promote global financial stability.

On Tuesday, the IMF released the Global Financial Stability report and found that rising geopolitical tensions increase risks in the financial system through loss of capital, impacts on the banking sector and less opportunities to cushion external shocks.

“Based on IMF analysis, the shock of the Ukraine war is making other economic shocks worse,” added LeCompte. “The war in Ukraine means that the poorest countries have less capacity to face shocks and will suffer the most."

On Thursday, G20 Finance Ministers meet. On Saturday, the IMF and World Bank Spring Meetings conclude. 

Read Jubilee USA's press release on IMF chief Kristalina Georgieva's curtain-raiser speech here. 

Read more about the New York Taxpayer and International Debt Crises Protection Act here. 

Join the Jubilee USA Friday, April 14th, 2:00 PM Community Park Press Conference outside the IMF with leader from the Africa Catholic Bishops, Bishop Charles Kasonde, Rev. Charles Chilufya S.J., Latindadd's Patricia Miranda, Athena Peralta of the World Council of Churches, the AFL-CIO's Policy Director Candace Archer and Jubilee's Eric LeCompte. More info and registration here.

Read the full World Economic Outlook Report here.

Read the full Global Financial Stability Report here.

Find Jubilee USA's April 14th interfaith vigil and press conference details here.

Global Growth Remains Low Amidst Debt Concerns, War and Inflation, Says IMF Head

By Anjoulie Woodhead

The challenges to the global economy and slow economic growth will continue this year, said IMF Managing Director Kristalina Georgieva. Delivering her traditional “curtain raiser” speech before the opening of the IMF and World Bank Spring meetings, she anticipated a 3% growth this year, below 3.4% last year.

“The IMF is reporting bad news for wealthy and poor countries,” said Eric LeCompte, Executive Director of the religious development group Jubilee USA Network. LeCompte monitored IMF policies for more than a decade. “The vulnerable are struggling with the pandemic, inflation and rising food prices.”

For the poorest countries, the IMF chief sees higher debt payments and lower demand for what they export. This could fuel further hunger and poverty increases.

Sixty percent of low-income countries and a quarter of emerging economies are at or near debt crises. Since February the IMF initiated, alongside the Indian Presidency of the G20 and the World Bank, a Global Sovereign Debt Roundtable to resolve disagreements that stall debt relief processes.

“While more countries face debt crises, we still don't have a fully functioning debt relief process,” noted LeCompte. "Developing countries need debt relief and access to more resources."

Georgieva called for donor countries to address funding shortfalls so the IMF maintains capacity to provide interest-free loans to the poorest members. 

Watch the curtain-raiser speech here.