By Zoila Palma: Recent meetings of the International Monetary Fund (IMF) and the World Bank ended without major new initiatives to help developing countries navigate mounting economic challenges, including the expanding conflict in the Middle East, the ongoing war in Ukraine, rising debt payments and uncertainty surrounding artificial intelligence (AI).
Lower-income nations continue to face the effects of global instability, including higher borrowing costs, inflation and concerns that they could fall further behind economically, Reuters report.
IMF Managing Director Kristalina Georgieva warned that developing countries were struggling with debt-service payments that have more than doubled over the past decade, averaging 14 percent of government revenue.
These expenses are leaving governments with fewer resources for essential services such as education and healthcare. While international lenders continued to encourage countries to reduce fiscal deficits and implement economic reforms to attract private investment, critics argued that the meetings failed to provide concrete guidance on managing emerging global risks, particularly the uncertain economic impact of AI.
World Bank Deputy Chief Economist Ayhan Kose said the global economy had weathered a major energy shock better than expected, avoiding a worldwide recession, but growth prospects had weakened.
Economic growth in developing countries had slowed to approximately 3.6 percent from 4.4 percent, while growth had also declined in half of advanced economies.
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