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IMF Sounds Debt Warning as It Offers Rethink on Restructurings

  • World’s debt is set to approach record levels this year
  • IMF proposes changes to system for resolving sovereign debt

The International Monetary Fund sounded a warning over rising global debt levels and proposed reforms to the debt-restructuring process for countries that struggle to meet their obligations, a number that is set to rise as the pandemic batters economies.

With the world’s debt set to approach record levels this year and about half of all low-income countries either in or at risk of debt distress before the health crisis, central banks have cut rates to supply liquidity and institutions such as the IMF, Group of 20 and World Bank have provided emergency and debt-service relief.