In light of recent global economic developments

Solution

• Following the COVID-19 pandemic and the subsequent period of high global inflation and interest rates, many  low and middle-income countries are facing severe debt sustainability challenges . Countries like Sri Lanka, Ghana, Zambia, and Ethiopia have defaulted or are in debt distress. A key role of the IMF in this context is to  provide financial support through lending programs and to act as a catalyst and coordinator for debt restructuring negotiations  between borrowing countries and their creditors (both official bilateral lenders like the Paris Club and China, and private bondholders). This has been a dominant theme in global economic news.