Poorest countries need US$ 436,000 million for consequences of the COVID

Of that amount, $170 billion is to address the effects of the pandemic, such as learning loss and worsening poverty, and bolster reserves. The rest is needed to help low-income countries reach the median ratio of spending to gross domestic product in emerging markets by 2026, according to a report released Thursday by the Washington-based lender.

“The combined impacts of the pandemic and Russia’s war in Ukraine have disproportionately affected low-income countries,” said the background. “They now face the challenge of resuming income convergence in the context of a weak and uncertain global economic environment”.

Poor nations are reeling from inflation, higher interest rates, and rising food and energy costs, while facing record levels of debt, climate change, and slow growth or recession. IMF calculations show that around a third of the world economy will experience at least two consecutive quarters of contraction this year and next, with lost output through 2026 amounting to $4 trillion.

Rising prices have forced central banks around the world to tighten monetary policy, and the Federal Reserve’s hawkish stance has sent the dollar soaring. Meanwhile, developing countries have accumulated a quarter trillion dollars of distressed debt that threatens to create a historic cascade of defaults.

The 69 countries, which the IMF defines as those that are eligible for funds from its Poverty Reduction and Growth Trust Fund, have lost several years of progress toward achieving the United Nations’ sustainable development goals. United in areas such as poverty and education. Most of them are in Africa.

“With greater challenges under a more constrained resource endowment, the removal of structural barriers to sustained and inclusive growth has become increasingly important”the IMF said in a statement accompanying the report.

Monetary policy makers “they should use all available instruments” to fight inflation, protect the vulnerable, preserve growth, contain debt vulnerabilities and manage financial sector risks, the fund said.

He added that countries need to consider maintaining credible fiscal and monetary policy frameworks and not losing sight of longer-term issues such as poverty, inequality, climate change and digitalization.