By David Lawder
WASHINGTON (Reuters) -Creditor committees for the debt restructurings of Chad, Ethiopia and Zambia are expected to meet within the next 10 days, International Monetary Fund Managing Director Kristalina Georgieva said on Tuesday.
Georgieva, speaking to a forum sponsored by the Devex development media group, said the risks of a debt crisis among developing countries were rising because of interest rate hikes in advanced countries to control inflation.
She said a positive outcome from the negotiations was crucial for Chad, Ethiopia and Zambia “and to energize other countries to step forward” to seek restructurings.
She also said she would make clear the need for more cooperation on debt relief at a G20 finance leaders’ meeting later this week in Bali, Indonesia.
“There is a growing risk of a debt crisis. I want to spell it out as clearly as I can and I will do that in the next days over there” in Indonesia, she said. “Why? Because the level of debt has gone up during the pandemic, financial conditions are tightening – more expensive to service it.”
She said that 30% of the developing and emerging markets are at or near debt distress levels, while that rate doubles to 60% for low-income counties.
“So if we don’t act, guess what is going to happen? Not good for these countries and certainly not good for financial stability,” Georgieva said.
(Reporting by David Lawder; editing by Philippa Fletcher and Barbara Lewis)
