IMF Warns of ‘Economic Collapse’ Unless G20 Extends Debt Relief

The IMF on Thursday urged the advanced economies of the G20 to expand and improve its debt relief initiative, warning that many countries face a severe crisis without assistance.

“We could see an economic collapse in some countries unless G20 creditors agree to accelerate debt restructurings and suspend debt service while the restructurings are being negotiated,” said IMF chief Kristalina Georgieva in a blog, adding that it was essential that private creditors also provide relief.

The G20 Debt Service Suspension Initiative (DSSI) expires at the end of the year, and without a renewal, countries could face financial pressures and spending cuts just as the news Covid-19 variants are spreading and interest rates are expected to rise, she said.

“The challenges of debt 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 some time,” Georgieva said in the blog co-authored by Ceyla Pazarbasioglu, director of fund strategy. , Policy and Review Department.

Given the problems with the debt relief program and the common framework for dealing with private creditors, only three countries so far have requested relief – Chad, Ethiopia and Zambia – and they have suffered. “significant delays”.

The framework has “not yet delivered on its promise. It requires swift action,” she said.

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