While very different countries such as Ukraine, Egypt, Pakistan, Sri Lanka and Zambia currently have something in common: they are all in contact with International Monetary Fund (IMF) to secure loans.

“Countries from all over the world are turning to the International Monetary Fund for loans as their economies fluctuate,” Bloomberg notes in its analysis, even presenting the IMF as “financial firefighter of the world(“Financial firefighter of the world”).

Volatility factors

The case of each country obviously has its own characteristics, but in general there is combination of high inflation, declining foreign exchange reserves, rising borrowing costs, growth constraints and political instability.

“The IMF, as part of a structure formed in the closing days of World War II to bring about greater global stability, has at times been controversial because of the conditions (see significant spending cuts, etc.) that come with its programs. But together with China, the IMF is the lender of last resort, and as a barometer of risk it is now red,” Bloomberg continues in its analysis, looking at countries such as Pakistan, Sri Lanka, Zambia, Egypt and Ukraine.

Pakistan, facing not only political turmoil at home but also deadly floods, has just received a loan of around $1.1 billion to stave off a looming default.

Sri Lanka is also close to agreeing on a nearly $3 billion loan, and Zambia has just received $1.3 billion of IMF board approval.

Egypt is also in talks with the IMF for a new loan, and six months after the Russian invasion, Ukraine is also asking for money from the International Monetary Fund.

Rising energy and food prices are now exacerbating the burden caused by the pandemic period, with Bloomberg even arguing that there are fears of shock even to a resilient economy.

Source: Bloomberg.