A fresh mass outbreak of Covid-19 could increase the risks of an external debt crisis among emerging and developing economies which are vulnerable to sudden capital outflows, the IMF warned on Tuesday.
The economic impact of the pandemic has been especially acute for countries that rely on oil, tourism or remittances from migrant workers. Many of these countries faced a fall in their current account balances this year equivalent to more than 2 per cent of gross domestic product, said the IMF.
In its annual assessment of global imbalances, the fund said trade balance losses were likely to exceed 3 per cent of GDP for oil exporters such as Norway, Russia and Saudi Arabia. In countries such as Costa Rica, Morocco and Portugal, losses of tourism proceeds could exceed 2 per cent of GDP, while lower remittances would hit hardest in countries such as Guatemala, Pakistan and Egypt.