In its World Economic Outlook report issued yesterday, the IMF said global growth for this year would be 3.6 percent, down 0.8 percentage points from its estimate in January and 1.3 percentage points lower than the forecast six months ago. For 2021, it said growth would come in at 6.1 percent. These figures, however, only partially depict a picture of a rapidly worsening economic outlook amid continuing supply chain constrictions due to the COVID-19 pandemic and surging inflation, exacerbated by the war in Ukraine and tighter monetary policy, as central banks lift interest rates. The WEO report said “unusually high uncertainty” surrounded its forecasts and “downside risks to the global outlook dominate.”
International Monetary Fund
The conditions of nearly 90% of the International Monetary Fund's pandemic-related loans are forcing developing nations suffering some of the world's worst humanitarian crises to implement austerity measures that fuel further impoverishment and inequality, an analysis published Tuesday by Oxfam International revealed. Oxfam found that "13 out of the 15 IMF loan programs negotiated during the second year of the pandemic require new austerity measures such as taxes on food and fuel or spending cuts that could put vital public services at risk." This stands in stark contrast with IMF managing director Kristalina Georgieva's admonition to the European Union last year that the wealthy bloc should not endanger its economic recovery with "the suffocating force of austerity."
On January 11, 2022, the United Nations (UN) Emergency Relief Coordinator Martin Griffiths appealed to the international community to help raise $4.4 billion for Afghanistan in humanitarian aid, calling this effort, “the largest ever appeal for a single country for humanitarian assistance.” This amount is required “in the hope of shoring up collapsing basic services there,” said the UN. If this appeal is not met, Griffiths said, then “next year  we’ll be asking for $10 billion.” The figure of $10 billion is significant. A few days after the Taliban took power in Afghanistan in mid-August 2021, the US government announced the seizure of $9.5 billion in Afghan assets that were being held in the US banking system. Under pressure from the United States government, the International Monetary Fund also denied Afghanistan access to $455 million of its share of special drawing rights, the international reserve asset that the IMF provides to its member countries to supplement their original reserves.
Any day now, Zambia will be the first African country to slip into a private debt default. It can only pay interest on the $3 billion in dollar-denominated bonds if it totally ignores the needs of the Zambian people. The country has suffered from the slowdown of the world economy, which impacted the sale of its copper for a part of this year (although copper prices and future prices have now begun to rise). Cosmas Musumali, the general secretary of the Socialist Party of Zambia, says that the convulsions of indebtedness are not only due to the coronavirus recession but also to the wealthy bondholders and to the ‘cluelessness’ of the government of President Edgar Lungu of the Patriotic Front.