Low-income countries: IMF working to better assess risks of domestic debt

WASHINGTON: The International Monetary Fund is working to deepen its analysis of the risks that domestic debt poses to the debt sustainability of low-income countries, the global lender’s strategy chief, Christian Mumssen, said on Wednesday.

Mumssen told an event hosted by the Atlantic Council that the IMF was working to continue improving the Common Framework for Debt Restructuring, which was created by the Group of 20 major economies during the COVID pandemic to help countries at risk of not being able to service their debts.

He said the IMF and World Bank were looking at the impact of domestic debt - versus external sovereign debt - as part of an assessment of the debt sustainability of low-income countries, noting that the number of low-income countries at high risk of debt distress had dropped to one-third.