The IMF urged advanced economies in the G20 on Thursday to expand and deepen their debt relief programme, warning that many countries would face a dire crisis without it.
“We may see economic collapse in some countries unless G20 creditors agree to speed debt restructurings and stop debt service while restructurings are negotiated,” IMF Managing Director Kristalina Georgieva said in a blog, adding that private creditors must also provide relief.
The G20 Debt Service Suspension Initiative (DSSI) is set to expire at the end of the year, and if it is not renewed, countries may face financial pressure and spending cuts at a time when new Covid-19 versions are gaining traction and interest rates are projected to rise, she warned.
“Debt problems are pressing, and immediate action is required. The recent Omicron variant comes as a clear reminder that the pandemic is here to stay “In a blog post co-authored by Ceyla Pazarbasioglu, director of the fund’s Strategy, Policy, and Review Department, Georgieva noted.
Only three nations have filed for debt relief so far, Chad, Ethiopia, and Zambia, due to issues with the debt relief programme and the shared framework for dealing with private creditors, and they have encountered “severe delays.”
The framework is in place “It has yet to fulfil its promise. This necessitates immediate action “she stated
