Covid-19: IMF Seeks More Debt Relief For Vulnerable Economies
The International Monetary Fund (IMF) has called for a more comprehensive debt relief for many vulnerable economies as a result of the COVID-19 pandemic.
This was one of the outcomes of the virtual meeting of Finance Ministers and Central Bank Governors of IMF-member-countries of the Group of 20 chaired by Saudi Arabia.
A statement signed by the IMF Managing Director, Kristalina Georgieva, said the global economy faces a deep recession in 2020, with partial and uneven recovery expected in 2021 due to the continuing impact of the COVID-19 pandemic.
The IMF called for further action to support a resilient recovery as many countries gradually reopen their economies following the COVID-19 pandemic.
“We need to unite to help the poorest and most vulnerable economies, especially those struggling with high debt or dependent on hard-hit sectors.
“The G20’s Debt Service Suspension Initiative (DSSI) has been commendable and I hope that consideration will be given to extending it.
“In addition, to make it even more effective, greater private sector participation, and greater debt transparency, should be strongly promoted.
“Beyond the DSSI, there is a need to fill gaps in international debt architecture and think about more comprehensive debt relief for many countries. We stand ready to support these efforts,” the Fund said.
It called on the G20 and others to support countries in fighting the crisis and to prevent long-lasting scarring of the global economy, particularly waves of bankruptcies, risks to financial stability, high unemployment, and increasing inequality
The IMF further advocated the continuation of supportive fiscal and monetary policies until a safe and durable exit can be secured from the crisis.
“Premature withdrawal of this support could derail the recovery and incur larger costs,” it added.