Thursday, Jul 9, 2020
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World Bank, IMF urge suspension of debt payments in poorest countries

World Bank IMF coronavirus
Official bilateral creditors have been asked to provide immediate debt relief to IDA countries

The World Bank and the International Monetary Fund have requested official bilateral creditors to provide immediate debt relief to the world’s poorest economies. The World Bank and IMF are pushing creditors to ease credit recovery on the back of the Coronavirus pandemic. 

Official bilateral creditors have been asked to suspend debt recovery from International Development Association (IDA) countries on the basis of request, media reports said. 

According to the association’s website, a majority of the 76 countries under IDA support have their gross national income per capita of less than $1,175 in 2020. The World Bank and the IMF believe that debt payments will place undue pressure on the populations of these countries in the midst of the coronavirus crisis. 

The World Bank and IMF said in a statement, “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 announcement was made on the eve of the G20 virtual summit on Covid-19. During the summit, the two financial institutions also said that there will be major economic and social consequences for those IDA countries as a result of the coronavirus outbreak. They have called on the world’s largest economies (G20) to support their request, media reports said. 

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