The IMF is fully committed to supporting our member countries, particularly the most vulnerable; we have the tools to help; and we are coordinating closely with our partner institutions.
While Chinese banks have become the top cross-border lender to EMDEs, their expansion has slowed recently, both in terms of volume and market share. Also, the strong correlation of China’s bilateral trade and its banks’ cross-border lending has weakened, while during 2020-22 lending became more positively correlated with FDI. In our paper, we analyse these patterns and we explore the role of borrower risk variables and foreign policies. Our findings show that, although the shifting correlation from trade to FDI is a general EMDE phenomenon, China’s Belt and Road Initiative reinforces it. By contrast, borrowers that potentially benefit from geoeconomic fragmentation do not display stronger FDI-lending relationships. We also find that Chinese banks exhibit different levels of risk tolerance relative to other bank nationalities as borrower country risk variables are positively correlated with Chinese banks’ market shares, but not with their amounts of cross-border lending.
In recent years, Hungary’s non-financial corporations were confronted with multiple shocks, ranging from the pandemic and rising geopolitical tensions to the historic tightening of domestic monetary policy. Employing machine learning techniques, this paper examines the determinants of Hungarian listed firms’ credit risk evolution over this period. Our analysis shows that both firm-specific and macroeconomic factors played a role in explaining the observed rise in firms’ default probability at onset of the pandemic, although Hungarian corporates proved broadly resilient, with risk indicators quickly improving a year after. Firms’ credit risk rose again in 2022, however, as both long-term interest rates and sovereign risk premia sharply increased, despite continued improvements in firms’ financial ratios. This development merits continued monitoring, particularly since a significant portion of corporate loans are set to mature within the next few years and could be repriced at higher interest rates.
Prospective home buyers face high prices and elevated borrowing costs, while homeowners refrain from listing their properties
Special drawing rights are providing an important boost for countries that need one, but greater support is encouraged to strengthen our unique lending tools
In the most vulnerable countries, strengthening state capacity must adapt to more frequent economic shocks, greater political instability, and fewer resources
Although global debt recorded another significant decline in 2022, it is still high, with debt sustainability remaining a concern
The August 2021 allocation of special drawing rights supported countries amid recovery from the pandemic—and continues to offer benefits
The economic gains from $272 billion in pandemic support for 94 countries were strongest in the poorest and more vulnerable recipients of IMF concessional financing
With shock upon shock hitting the world economy in the last three years, IMF Managing Director Kristalina Georgieva's customary opening speech to the Annual Meetings warned of a darker global outlook and emphasized the need for the world to come together to deal with the consequences.
