IMF, World Bank call for debt relief for poor countries

Washington: International Monetary Fund (IMF) and World Bank have signaled at the need for debt payment relief for poor countries in the wake of coronavirus pandemic.

IMF and World Bank have issued a joint statement urging creditors to suspend debt payments from International Development Association (IDA) countries upon request.

“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 statement said.

Most of the 76 countries receiving IDA support have gross national income per capita of below $1,175, a threshold that is updated on annual basis.

The IDA is one of the largest sources of assistance for the world’s 76 poorest countries, providing zero or low interest loans spread over 30 years or more, to distressed countries.

“The coronavirus outbreak is likely to have severe economic and social consequences for IDA countries. Immediate liquidity needs to tackle challenges posed by the coronavirus outbreak,” the statement added.

According to IMF and World Bank, suspending debt payments will provide a sense of relief for developing countries and will stabilize the financial markets around the globe.