World Bank and IMF Urge Debt Repayment Suspension to Help Low-Income Countries Fight COVID-19

[Asia Economy Reporter Naju-seok] As the novel coronavirus infection (COVID-19) rapidly spreads to low-income countries, the World Bank and the International Monetary Fund (IMF) have requested countries to grant debt repayment relief. The aim is to allow limited resources to be focused on healthcare and related areas.

On the 25th (local time), the World Bank and IMF issued a joint statement requesting creditors to provide debt relief to 76 countries receiving support from the International Development Association (IDA).

The joint statement said, "Due to the outbreak of COVID-19, IDA-supported countries may face severe economic and social consequences," and requested, "Creditors should show leniency such as granting debt repayment relief to IDA-supported countries so that governments, the World Bank, and the IMF can immediately take effective action under the law."

It added, "Such debt repayment relief will not only provide the liquidity necessary for IDA-supported countries to combat COVID-19 but also buy them time."

Countries receiving IDA support are extremely poor nations with a per capita income below $1,175 (1.44 million KRW), accounting for one-quarter of the world's population.

In particular, the World Bank and IMF have called on the Group of Twenty (G20), which includes Korea, to take action. The G20 plans to hold a video conference on the 26th to discuss an action plan against the spread of COVID-19. These institutions have requested the G20 to assess the scale of damage that IDA-supported countries will face and the level of debt relief needed, while also preparing for creditors to officially grant debt repayment relief.

IDA-supported countries must repay $40 billion (49 trillion KRW) this year. The World Bank and IMF estimate that more than half of this amount corresponds to intergovernmental loans.

This content was produced with the assistance of AI translation services.