The Group of Seven (G7) nations said on Wednesday it was committed to suspending debt payments for the poorest countries through the end of 2020, and possibly beyond, to help them cope with the continued difficulties posed by the novel coronavirus pandemic
WASHINGTON (Pakistan Point News / Sputnik - 03rd June, 2020) The Group of Seven (G7) nations said on Wednesday it was committed to suspending debt payments for the poorest countries through the end of 2020, and possibly beyond, to help them cope with the continued difficulties posed by the novel coronavirus pandemic.
"In this context, we are committed to implementing the Debt Service Suspension Initiative (DSSI) agreed by the G20 and the Paris Club, by suspending official bilateral debt payments for the poorest countries to year-end 2020 and possibly longer, providing those countries fiscal space to fund social, health, and other measures to respond to the pandemic," a statement circulated by the US Treasury Department on behalf of the G7 said.
The decision to provide debt relief came after a conference call between G7 finance ministers and relevant World Bank and IMF officials.
The G7 said the debt relief will be provided through export credit agencies and other public lending agencies and official creditors.
In addition, the G7 said it welcomed support from international financial institutions (IFIs) for the most vulnerable countries hit by the pandemic.
"We call on the IFIs, borrowers, and creditors to work together on strengthening public reporting of debt data used in debt sustainability analyses, including a breakout by external creditor and more thorough coverage of contingent liabilities, state-owned enterprise debt, and collateralized financing," the statement said. "The IFIs can encourage and support borrowing countries' efforts to enhance public debt disclosure, limit non-concessional borrowing when necessary, and reduce debt vulnerabilities."
The Washington-based Congressional Research Service estimates that global growth could be trimmed by as much as 2 percent per month if economic fallout from the measures imposed to fight the novel coronavirus continues, while total world trade could fall by between 13 percent and 32 percent depending on the depth and extent of the downturn.