The International Monetary Fund (IMF) says it has extended zero-interest loans to low-income countries in the past two years. The loans tied to IMF programme called the “Poverty Reduction and Growth Trust” offers concessional lending rates.
IMF Managing Director Christine Lagarde notes that current global economic challenges have put many low-income countries at risk. Already, an IMF bi-annual report on the state of the global economy released recently has predicted that global growth will be “subdued” and uneven while the World Economic Outlook report projects the economy to grow by 3.1 percent in 2016.
The report notes strong growth in Asia but weaker growth in Latin America, Africa, the Caribbean and advanced economies. IMF data reveals that 55 of 70 low-income countries are in “debt distress” or at risk of debt distress.
The extension of the zero-interest loans by two additional years is heartwarming for leaders of the world’s poorest countries facing worse trading conditions and effects of climate change.
By Olisemeka Obeche