WASHINGTON (AN) — As finance ministers and central bankers gather in the U.S. capital next week, economic uncertainty drags on efforts to tackle climate finance and the sovereign debt crisis among low-income nations.
Leaders from nearly 191 nations will gather for the Annual Meetings of the World Bank Group and the International Monetary Fund amid mounting pressure to deliver on massive financing needs while navigating a global landscape of soaring public debt and rising geopolitical fragmentation.
"All of this plays out against a backdrop of deep transformations: in geopolitics; in technology; in demographics, with populations surging in some places and shrinking in others; and in the mounting harm we do to our planet," said IMF Managing Director Kristalina Georgieva.
"The result is exceptionally high uncertainty: globally it has shot up and continues to climb," she said in a curtain-raiser speech on Wednesday. "Buckle up: uncertainty is the new normal and it is here to stay."
The stark financial mood was set this week as gold prices hit $4,000 an ounce for the first time. IMF will establish the economic baseline by releasing two widely anticipated reports next week.
A key focus will be implementation of the IMF's climate strategy, a comprehensive framework for integrating climate change into all of its core activities: oversight, lending, and technical assistance.
The strategy marked a shift from treating climate change as a secondary risk to acknowledging it as a macro-critical issue that fundamentally impacts global economic stability, growth, and financial health.
Debt, austerity, and country crises
The Global Sovereign Debt Roundtable, co-chaired by the World Bank, IMF, and the G-20 presidency, aiming to wrap up a "Debt Restructuring Playbook" based on World Bank statistics.
A central focus is the need to link debt relief with climate action. Specific mechanisms being explored include climate-resilient debt clauses and the scaling up of debt-for-nature or debt-for-climate swaps. Analysts, however, point to the G-20’s failure to provide comprehensive debt relief.
In institutional policy guidance, Georgieva insisted the U.S. must address its high national debt, which is now $37.8 trillion. She called on China to boost consumption and curb industrial subsidies, and urged Europe to accelerate reforms toward a single market across the European Union.
Though the global economy is forecast to grow 3% this year, she also advised caution. "Before anyone heaves a big sigh of relief, please hear this: global resilience has not yet been fully tested," said Georgieva.
"And there are worrying signs the test may come," she added. "Just look at the surging global demand for gold. Spurred by valuation effects and net purchases—partly reflecting geopolitical factors—holdings of monetary gold now exceed one-fifth of the world’s official reserves."
IMF also provided specific country-level updates: Argentina, the nation most exposed to IMF, got a $20 billion loan in April to stabilize its economy.
IMF is pressing Ukraine to establish a budget declaration to frame fiscal policy around recovery and defense needs. IMF expects the Russian economy to slow sharply this year due to tight policies and cyclical factors.
Finally, IMF is working with Senegal to resolve a confirmed misreporting case involving underreporting of fiscal deficits and public debt.
Climate finance targets and governance gap
A critical test for multilateral development banks is the COP29 pledge in Baku to mobilize $1.3 trillion a year of climate finance by 2035.
The World Bank is responding by pushing its capital reform agenda and launching new initiatives, including one aimed at connecting farmers with more financing, while G-20 finance ministers are expected to outline levers to unlock $1.3 trillion in external climate finance for emerging markets.
However, critiques of multilateral development banks' effectiveness are mounting. Preliminary results from an independent 2025 client survey cite persistent concerns among governments over their effectiveness, weak coordination, and lengthy project cycles.
The 2024 Compromiso de Sevilla agreement highlighted a governance gap, with borrowing countries still lacking sufficient voice and representation in decision-making. Adopted at Seville, Spain, it is meant to help developing countries tackle climate change, debt and other priorities.
An IMF initiative to boost resilience and trust is under review, with analysts stressing a need to help the most climate-vulnerable nations.
Civil society pressure
Global Unions, including the International Trade Union Confederation, want fundamental institutional reform.
Their key demands focus on multilateral development banks: an end to all austerity measures and public-sector wage constraints; support for international coordination on progressive taxation and measures to tackle tax evasion; and more fiscal alignment with International Labor Organization standards, rather than tools that may lower labor standards.
Conversely, IMF highlighted Rwanda’s leadership in integrating climate into macroeconomic policy through the adoption of a green taxonomy and best practices in climate risk reporting.
