WASHINGTON - Shareholders of the International Monetary Fund agreed this week on the importance of addressing challenges faced by low-income countries, many of which are facing unsustainable debt burdens, IMF Managing Director Kristalina Georgieva said on Friday.

Multiple reports from the IMF and the World Bank this week sounded the alarm about economic developments and prospects in low-income developing countries, which are still grappling with the aftermath of the COVID-19 pandemic and other shocks.

Georgieva said the IMF was working to reinforce its ability to support low-income countries hit hardest by recent shocks, including through a 50 percent quota share increase and by adding resources to its Poverty Reduction and Growth Trust

The IMF lowered its 2024 growth forecast for low-income countries as a group to 4.7 percent from an estimate of 4.9 percent in January. In a separate report, the World Bank said half of the world's 75 poorest countries were experiencing a widening income gap with the wealthiest economies for the first time this century in a historical reversal of development.

Georgieva said the IMF was working to reinforce its ability to support low-income countries hit hardest by recent shocks, including through a 50 percent quota share increase and by adding resources to its Poverty Reduction and Growth Trust.

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Georgieva and Saudi Arabia's Finance Minister Mohammed Al-Jadaan, who chairs the IMF's steering committee, both said internal reforms adopted by the IMF this week should help make the debt restructuring process speedier and smoother.

Georgieva said a meeting of the Global Sovereign Debt Roundtable hosted by the IMF and the World Bank this week had made progress on setting timelines for debt restructurings and ensuring comparability of treatment for various creditors.

She said high debt levels posed a huge burden for low-income countries, including many in Sub-Saharan Africa, where countries are now facing debt service payments of 12 percent on average, compared to 5 percent a decade ago. High interest rates in advanced economies have lured away investments, and raised the cost of borrowing.

Affected countries needed to increase their domestic revenues by raising taxes, continuing to fight inflation, paring back spending and developing local capital markets, she said.

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The Bulgarian economist said it was vital for these countries to make themselves more attractive to investors, and said the IMF was engaging with countries to help them do that.

Incomes in Sub-Saharan Africa are falling further behind the rest of the world amid a "tepid" economic recovery, the IMF said, warning of risks from geopolitics, domestic instability and climate change

In Sub-Saharan Africa, incomes are falling further behind the rest of the world amid a "tepid" economic recovery, the IMF said, warning of risks from geopolitics, domestic instability and climate change.

"When accounting for population growth, the income gap with the rest of the world is widening," the fund said in its biannual Regional Economic Outlook report.

It noted that other developing countries saw real income per person more than triple since 2000, while they grew 75 percent in Sub-Saharan Africa and 35 percent in developed countries.

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"Two-thirds of the countries are already experiencing acceleration in growth; diversified and fairly broad-based growth," said Abebe Selassie, director of the IMF's African Department, said in an interview with Reuters in Washington.

Many of the more diversified economies had already enjoyed some growth recovery since the pandemic, he added.

Inflation falling

Economic conditions have started to ease for many countries in Africa this year, with Ivory Coast, Benin and Kenya issuing international bonds and median inflation falling to 6 percent in February from almost 10 percent a year earlier, the IMF said.

Devastating droughts last year in the Horn of Africa and currently in southern Africa, as well as cyclones and floods, have also increased the region's struggles.