Third World Debt Troublesome, but IMF Sees Progress
Third World countries’ failure to make headway in reducing their debt is the main cloud over the world economy, but Western Europe, Asia and the United States have scored gains, the International Monetary Fund said Wednesday.
“Much of 1987 and the first part of 1988 were characterized by continued expansion in world output and trade,” the 151-nation, Washington-based organization said in its annual report. But, it said, “there is no room for complacency.”
The IMF said that besides indebtedness primarily in Africa and Latin America, other concerns are:
- The trade deficit and foreign debt of the United States.
- The lack of economic growth in Africa.
- The return to high inflation in Latin America.
The total debt of the developing countries increased 10.4% in 1987 to $1.2 trillion, compared to $1.1 trillion in 1986, the report said.
Governments and international organizations like the IMF loaned about $34 billion to developing countries during the year, while private lenders like commercial banks were “virtually drying up” as a source of needed new loans, the report said.