Sri Lanka's economy collapsed and people's lives fell into difficulty.

(AFP)

[Financial Channel/Comprehensive Report] China’s Belt and Road Initiative has caused many developing countries to fall into debt quagmire. Coupled with the impact of negative factors such as the epidemic and the Russian-Ukrainian war, a wave of defaults broke out one after another, including Zambia, Sri Lanka, Lebanon, Suriname, Russia, etc. has officially defaulted.

The IMF was forced to provide financial assistance to countries in severe situations. As of the end of August, the IMF loan amount had reached 140 billion US dollars (about 4.42 trillion Taiwan dollars), and the total amount that had not been approved reached 268 billion US dollars (about 8.47 trillion Taiwan dollars).

Analysts are worried and bluntly say that the IMF's financial aid capacity is approaching its limit.

The Financial Times reported that a new report from Boston University's Center for Global Development Policy shows that between 2022 and 2028, the world's 55 poorest countries will have to repay $436 billion in loans, of which about $61 billion will be paid this year and 2023. When it expires, it will be close to $70 billion in 2024.

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Dozens of countries have turned to the IMF for help in these poor countries due to the worsening economic situation due to the epidemic, Russia's invasion of Ukraine and a sharp rise in global interest rates.

According to an analysis of IMF data, as of the end of August, the fund had disbursed a total of $140 billion in loans across 44 separate projects, with more than $268 billion in agreed but not yet disbursed loans.

Among them, the more critical countries are Zambia, Sri Lanka, Lebanon, Russia, Suriname and other five countries. These five countries have defaulted on their debts, and they are all participating countries of China's Belt and Road Initiative. The IMF is working with Zambia and Sri Lanka on debt restructuring. Negotiations; the other three Belt and Road participating countries - Ghana, Egypt and Tunisia, are in early negotiations with the IMF on related financial assistance.

Pakistan and Argentina have recently been identified by the IMF for financial assistance. The IMF approved a US$1.1 billion rescue plan for Pakistan at the end of August; Argentina will receive US$3.9 billion in financial assistance in the next few weeks.

Analysts say the IMF's lending capacity may soon be reaching its limit as poor countries excluded from international debt markets have to turn to the IMF for help.

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