For the many economies that depend on tourism, remittances from relatives abroad, and exporting raw materials, a new global wave of the COVID virus could leave them even less able to service their already burdensome foreign debt, the IMF has warned.
These countries typically must import a range of necessities. The loss of income from a continuing weak global economy, coupled with the cost of caring for their own COVID victims, could cost many of the nations as much as 2 percent of GDP, the fund said.
Oil exporters such as Norway, Russia, and Saudi Arabia could lose up to 3 percent of GDP in foreign trade; the absence of tourists in nations such as Costa Rica, Morocco, and Portugal could wipe out 2 percent of GDP.
Egypt, Guatemala, Pakistan, and other countries relying on citizens sending money home from abroad also would be hit hard, the IMF said.
The new imbalances could push many precarious economies to default on foreign debt or beg help from the IMF and World Bank, the fund emphasized.
Canada, the U.K., and U.S. have outsized trade deficits, the fund noted; China and the Eurozone, particularly Germany, have large surpluses.
TREND FORECAST: We forecast sharp increases of government control among nations that will sink deeper into financial distress, which will in turn ignite civil wars, which will in turn escalate into regional wars.
