With the COVID-19 pandemic already hell-bent on infecting people on a global level, it is likely that by the end of this year, the global economy will substantially drain. The IMF and World Bank have urged its bilateral creditors to suspend debt payments from developing nations of the International Development Association (IDA) in a bid to help them endure their economic challenges.
Joint statement of World Bank IMF
Owing to the most recent meeting between officials of the IMF and the World Bank, the discussion analyzed that, with nearly two-thirds of the world’s population living in extreme poverty, the COVID-19 crisis which is economically straining, nations could agonize the third world countries.
Nonetheless, both the groups have called for the proposition that all official bilateral creditors must manifest leniency by suspending debts from IDA countries, for the time being. With no worries about reimbursing payment, the countries can work on financing their health needs, amidst the COVID-19 outbreak.
“We invite G20 leaders to task the WBG and the IMF to make these assessments. Importantly, this includes, identifying the countries with unsustainable debt situations. Moreover, prepare a proposal for comprehensive action by official bilateral creditors. This will be done by addressing the financing and debt relief needs of IDA countries. Clearly, we will seek endorsement for the Proposal at the Development Committee during the Spring Meetings (April 16–17).”
The statement added, “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 would welcome G20 support for this Call to Action.”
Coronavirus to cause more economic mayhem
Ever since the Coronavirus outspread happened, it has brought a drastic blow to global wealth. Statistics enumerate that at the start of this month, the economy observed a loss of trillion of dollars.
Moreover, it seems that the recent crude oil price feud and COVID-19 pandemic have correspondingly devastated the economy. Consequently, the most recent outcome of which is the global stock market crash.
Surprisingly, these circumstances have occurred when more than half of the world population is working. And now, with most of the countries are under complete lockdown, the future of the world’s economy remains in danger.
What do you think of the story? Tell us in the comments section below.