IMF calls on G20 to strengthen debt framework to help vulnerable nations

Addressing the debt of vulnerable countries has been one of the major points of discussions at this week's G20 meetings in Bengaluru, with pressure on China - a major creditor - to cooperate in the restructuring of debt.

The International Monetary Fund (IMF) has called on the G20 nations to strengthen the debt framework to help struggling and vulnerable countries.

"With global growth set to slow in 2023 and remain below its historical average, too many people in too many countries are struggling to make ends meet," Kristalina Georgieva, the IMF's managing director, said in a statement on February 25.

"The international community, therefore, has a responsibility to come together to find solutions for the most vulnerable members of our global family. This calls for urgent action to strengthen the international financial architecture, especially in the area of debt resolution and strengthening the global financial safety net," she added.

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Georgieva is in Bengaluru to attend the ongoing meeting of G20 finance ministers and central bank governors.

Read the latest developments on the G20 Finance Ministers meet here

Highlighting the agreement reached between the African nation of Chad and its creditors under the G20 Common Framework, Georgieva said it is now "critical" to complete Zambia's debt restructuring, establish a creditor committee for Ghana, and make progress with Ethiopia.

"Nonetheless, more predictable, timely, and orderly processes are needed both for countries under the Common Framework and for those not covered by it, including Sri Lanka and Suriname," Georgieva said in her statement.

Addressing the debt of vulnerable countries has been one of the major points of discussions at this week's G20 meetings in Bengaluru, with pressure on China - a major creditor - to cooperate in the restructuring of debt.

On February 24, US Treasury Secretary Janet Yellen said her conversations with her Chinese counterparts had been constructive and that she was hopeful of progress in the coming months.

Yellen's comments were followed by those of Bruno Le Maire, France's finance minister, who told reporters that while the G20 Common Framework had proved to be efficient, there was "no time" to improve it as developing countries were "waiting for decisions".

As part of the meeting of G20 finance ministers and central bank governors, India's Finance Minister Nirmala Sitharaman co-chaired the Debt Roundtable jointly with Georgieva and outgoing World Bank President David Malpass. As per tweets from the finance ministry, Sitharaman called for voices of the vulnerable and under-represented debtor countries to be heard through the G20.

In her statement issued today, IMF's Georgieva thanked Sitharaman and Reserve Bank of India Governor Shaktikanta Das for their leadership at the G20 meetings, adding that is a "relative bright spot" and a key growth engine for the world economy as it will account for about 15 percent of global growth in 2023.