The International Monetary Fund (IMF) urged the world’s most developed economies, gathered in the Group of 20 (G-20) to expand and improve their external debt relief initiative, warning that many countries could suffer an “economic collapse” if they don’t have that help.
“We may see an economic collapse in some countries unless G.20 creditors agree to accelerate a debt restructuring and suspend debt service while they negotiate that restructuring,” the IMF chief said in a blog., Kristalina Georgieva, adding that it is critical that private creditors also offer relief.
The Debt Service Suspension Initiative of the G-20 (Dssi)) expires at the end of the year and, if it is not renewed, several countries could face financial pressures and spending cuts just as a new variant of coronavirus spreads and an increase in rates is expected. interest, he remarked.
“The debt challenges are pressing and the need for action is urgent. The recent omicron variant is a stark reminder that the pandemic will be with us for a while, ”Georgieva emphasized on the blog, co-written with Ceyla Pazarbasioglu, Director of the IMF’s Strategy, Policy and Review Department.
Given the problems with the debt relief program and the common framework for dealing with private creditors, so far only three countries have requested the lightening of that burden – Chad, Ethiopia and Zambia – and face “significant delays” in their payments.
The operational framework “has yet to deliver on its promise. This requires quick action, “he said.
Voice of america