BENGALURU: IMF Managing Director Kristalina Georgieva has hailed India as a “bright spot” amidst slowing down global economy. She lauded the progress made by India on the digital public infrastructure front, at the first meeting of the G20 Finance Ministers and Central Bank Governors here on February 25. India provides an optimistic outlook for holistic growth in the near future, she said.
She appealed the G20 member and invitee countries to work in the direction of fortifying “the international financial architecture”, in particular the areas that deal with “debt resolution and global financial safety net” in the light of slowing down of global economy.
“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,” she said.
Calling on the G20 countries to protect the most vulnerable countries, she said, “the international community has a responsibility to come together to find solutions for the most vulnerable members of our global family.
Global financial safety net is a set of institutions and mechanisms that provide insurance against crises and financing to mitigate their impact. In light of rising debt vulnerabilities in many countries, she said, there is a need to strengthen the debt architecture and improve the speed and effectiveness of debt resolution.
Sovereign debt vulnerabilities, already elevated before the pandemic, have been exacerbated by the shocks stemming from Covid-19 and Russia’s war against Ukraine, she said, adding, this is particularly the case for developing and low-income countries with very limited policy space and huge development needs.
It is therefore imperative for G20 to strengthen the debt architecture and G20 did so in 2020 with Debt Service Suspension Initiative (DSSI) and by establishing Common Framework (CF) for debt resolution, she said.
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