Global economy ‘stronger’ than expected, says IMF committee

(Washington) The global economy has been “stronger” than expected six months ago and the “worst-case macroeconomic scenarios have not materialized”, the chair of one of the main committees of the International Monetary Fund (IMF).

“Compared to the situation we envisaged in the fall, the global economy has been stronger and the worst macroeconomic scenarios have not materialized,” said Nadia Calvino, Spain’s deputy prime minister and chair of the committee. IMFC, responsible for advising the IMF on monetary and financial issues, during a press conference.

Ms. Calvino also insisted on the “quick and decisive response of the authorities everywhere in the world in order to reassure the financial markets” after the failure of several American regional banks. But “authorities and financial institutions must remain vigilant” to avoid any downside risk, she added.

The Deputy Prime Minister more broadly underlined the “consensus” between member states on “essential topics”, in particular debt restructuring, increasing the IMF’s financing capacities, in particular for emerging and low incomes subject to global warming.

However, the committee could not agree on issuing a joint communiqué due to an inability to agree on how to present the Russian invasion of Ukraine.

And in fact, the consensus does not seem so clear on other subjects, in particular concerning the restructuring of the debt of countries in crisis.

Thursday, the launch of negotiations between bilateral creditors and the Sri Lankan government for the restructuring of the Indian Ocean island’s debt brought together all the main creditors, with the notable exception of China.

The co-chairs of this negotiating group, Japan, India and France, insisted that the latter remained open to all creditors, implicitly inviting China to join them.

On Friday, a statement from the Governor of the People’s Bank of China (PBC), Yi Gang, stressed the need for “multilateral development banks to make their contribution to the restructuring of the debt” of the countries in difficulty, ” including by providing sufficient subsidies”.

A stance that echoes several comments from experts pointing out that China wants the IMF and World Bank to also take a haircut on their loans to countries facing debt crises before making commitments itself. accurate.

The negotiations concerning the commitments of the creditors of several countries, in particular Ghana, Zambia or Ethiopia, are still in progress and do not allow these countries to benefit from the aid plan already negotiated with the IMF, which cannot act without having obtained the assurances expected from the bilateral creditors.