IMF plugs financing gaps as riskier emerging markets face squeeze

IMF plugs financing gaps as riskier emerging markets face squeeze

Washington - There's little relief in sight for a host of developing nations from Egypt to Malawi and from Pakistan to Ecuador, all of whom are facing a painful economic squeeze as the costs of servicing debt rise further.

Officials from the International Monetary Fund (IMF) and other bodies expect the debt crunch to heap more pressure on these so-called 'frontier markets', which are already struggling with the impacts of Russia's war in Ukraine and the Federal Reserve's tightening cycle to cool U.S. inflation.

Many of these countries are also still wrestling with the effects of the COVID-19 pandemic. Locked out of worldwide debt markets and with China redrafting its role as the lender of choice to many poorer nations, countries are increasingly relying on the help of the IMF to plug financing gaps.

"Their fiscal space to deal with all of this is very little," Gita Gopinath, the IMF's first deputy managing director, told a seminar on the sidelines of the annual IMF-World Bank Meeting. "We will grapple (with this) for several months to come."

The Washington-based lender has agreed new programmes or augmented existing ones for 18 countries to the tune of $90 billion since Russia invaded Ukraine in February, its managing