Coordinated action needed to halt spread of fragile states -IMF chief

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FILE PHOTO: International Monetary Fund (IMF) Managing Director Kristalina Georgieva remarks at an inaugural news conference during the IMF and the World Bank’s 2019 Annual Fall Meeting of Finance Ministers and Bank Governors in Washington, US October 17, 2019. REUTERS / Mike Thiler
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WASHINGTON (Businesshala) – International Monetary Fund Managing Director Kristalina Georgieva said on Monday that coordinated action is needed to arrest and reverse a growing number of fragile states.

Georgieva told a panel at the fall meetings of the IMF and the World Bank that the COVID-19 pandemic has exacerbated problems in states that are already suffering from extreme poverty, drought, rising food prices and in some cases war. more sensitive to problems.

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He said, “We must have the humility to acknowledge that the universe of fragile states is expanding, and that we will not arrest or reverse that trend unless we commit to bringing all of our forces together. “

Georgieva said economic trends were different for advanced economies and all developing countries, but the difference was far greater for fragile and conflict-ravaged states, which saw real GDP per capita fall by 6.6% in 2020 .

These countries also saw large increases in the public debt and were expected to withstand greater inflationary pressures, but had a harder time raising revenues.

Support from the international community was key to helping fragile states and reversing growing deviance, he said, noting that the IMF had provided $7.5 billion in support to support fragile states.

He said the IMF recently included a $16.2 billion fund for these countries in an allocation of $650 billion in new special drawing rights.

Reporting by Andrea Schallal; Editing by Chris Reese and Sri Navaratnam

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