WBG, IMF call to action on debt

The World Bank Group and International Monetary Fund have warned that the coronavirus outbreak “is likely to have severe economic and social consequences” for International Development Association (IDA) countries.

“With immediate effect and consistent with national laws of the creditor countries, the World Bank Group and the International Monetary Fund call on all official bilateral creditors to suspend debt payments from IDA countries that request forbearance,” the financial institutions said in a joint statement.

It added “this will help with IDA countries’ immediate liquidity needs to tackle challenges posed by the coronavirus outbreak and allow time for an assessment of the crisis impact and financing needs for each country”.

“We invite G20 leaders to task the WBG and the IMF to make these assessments, including identifying the countries with unsustainable debt situations, and to prepare a proposal for comprehensive action by official BILATERAL creditors to address both the financing and debt relief needs of IDA countries,” the statement noted. “We will seek endorsement for the Proposal at the Development Committee during the Spring Meetings,” due in April.

“The World Bank Group and the IMF believe it is imperative at this moment to provide a global sense of relief for developing countries as well as a strong signal to financial markets,” it remarked. (KUNA)