The International Monetary Fund has a responsibility to support poorer countries grappling with mounting debt burdens, high inflation and price shocks caused by the wider fallout of conflict, according to the head of the global financial institution.
Speaking as the IMF's annual meetings in Bangkok drew to a close on Saturday, Managing Director Kristalina Georgieva said discussions with global policymakers had revealed both "optimism and concern."
"Optimism because of the resilience of the global economy, the prospects of artificial intelligence, the dynamism of Asia," Georgieva told reporters. "But AI is also seen as a source of concern, and so are inflation, high levels of debt, wars and climate risks."
According to Georgieva, vulnerable countries are being left out of the AI investment wave that is driving growth in wealthier nations, while still facing higher borrowing costs.
With global interest rates elevated, low-income countries are now spending between 8 and 14 percent of their revenues on debt service, more than in previous years, she said.
"I can tell you that people everywhere, but especially in poorer countries, do not like inflation. Inflation is like a tax on the poor," Georgieva said.
The warnings came as low-income oil-importing countries bear the brunt of higher global energy costs. Prices have soared since February, when the United States and Israel launched a war against Iran, triggering retaliatory strikes across the Middle East and disrupting oil and gas flows.
"Escalating conflicts and trade tensions could continue to disrupt key trade routes, exacerbate commodity price pressures, including for refined energy products, and worsen energy and food security," said a statement from Saudi Finance Minister Mohammed Al-Jadaan, chair of the International Monetary and Financial Committee (IMFC).
The IMFC is the main steering committee of the 191-member crisis lender.
Debt relief and regional support
Georgieva said the fund has a responsibility to help countries restructure debt where needed, in order to help mobilize domestic resources, attract international financing and enable private investment.
She said these countries need to target spending on growth priorities and protect the most vulnerable, while stressing that the IMF is "relentlessly pursuing more resources for low-income countries."
"When we do our best, that translates into better lives for people," she said.
Georgieva also said the IMF plans to support Iraq "very solidly" with a lending program at the country's request, while talks with Lebanese officials are making progress.
"We will bring to Iraq both money and policy support," she said. "With Lebanon, we are in very intense discussions with the authorities. We have made considerable progress toward a program. There is still a bit of work for us to do together, and I am confident we will succeed."
