IMF chief Kristalina Georgieva added that it is critical that private creditors also offer relief.
The IMF on Thursday urged the G20 economies to expand and improve their initiative to foreign debt relief, warning that many countries could suffer an “economic collapse” if they do not have that help.
“We may see an economic collapse in some countries unless the G20 creditors agree to accelerate a debt restructuring and suspend its servicing while they negotiate that restructuring, “IMF chief Kristalina Georgieva said in a blog, adding that it is essential that private creditors also offer relief.
The G20 Debt Service Suspension Initiative (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 interest rates is expected, 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”On your payments.
The operational framework “has yet to deliver on its promise. This requires quick action, ”he said. (I)
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