IMF, World Bank Call for Suspending Debt Payments by Poorest Nations

The International Monetary Fund and World Bank has called for governments to put a hold on debt payments from the world’s poorest nations so they can battle the coronavirus pandemic.

The World Bank Group and International Monetary Fund said this in a joint statement to the G20 concerning debt relief for the poorest countries.

The coronavirus outbreak is likely to have severe economic and social consequences for IDA countries, home to a quarter of the world’s population and two-thirds of the world’s population living in extreme poverty, read the statement.

The Washington-based development lenders in a joint statement stated,

“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. 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. We will seek endorsement for the Proposal at the Development Committee during the Spring Meetings (April 16–17),” added the released statement.

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.

The international community will welcome G20 support for this Call to Action, added the Washington-based development lenders in a joint statement.

In response, Federal Minister of Economic Affairs, Hammad Azhar welcomed the joint statement of WB & IMF calling upon G20 countries to suspend debt payments of developing countries.

He tweeted that Prime Minister Imran Khan has been urging this since COVID-19 pandemic.

He hopes that it shall be accepted and has also urged multi-laterals for relief on their debts as well.