IMF urges tough reforms for countries facing debt distress

The International Monetary Fund (IMF) is urging countries with high public debt to take action. They need to make tough decisions to restore debt sustainability.

At the 2025 IMF/World Bank Group Spring Meetings, Managing Director Kristalina Georgieva announced new plans. The IMF will introduce a structured guide for countries facing debt restructuring. This guide aims to help stabilize their economies.

Georgieva stated that countries should proactively address their debt challenges. They may need to pursue debt restructuring when necessary. She also mentioned the Global Sovereign Debt Roundtable will publish a playbook soon.

Emerging market economies should maintain exchange rate flexibility. This can act as a buffer against economic shocks. Policymakers can refer to the IMF’s Integrated Policy Framework for guidance on temporary measures.

Georgieva stressed the importance of vigilance from central banks regarding inflation expectations. She highlighted the need to protect both banking and non-banking financial institutions. Central bankers must closely monitor data on inflation trends.

Strong regulation and supervision are essential for keeping banks safe. Additionally, rising risks from non-banking institutions must be monitored and contained, she emphasized.