IMF extends debt relief for 28 countries

ANKARA

The International Monetary Fund (IMF) approved late on Monday a second six-month tranche of debt service relief for 28 low-income member countries under the Catastrophe Containment and Relief Trust (CCRT).

This approval follows the first six-month tranche from April to October “and enables the disbursement of grants from the CCRT for payment of eligible debt service falling due to the IMF from October 14, 2020 to April 13, 2021” estimated at $227 million, read an IMF statement.

“Subject to the availability of sufficient resources in the CCRT, debt service relief could be provided for a total period of two years, through April 13, 2022, estimated at nearly $959 million,” it said.

According to the IMF, the relief on debt service will help countries utilize “scarce financial resources for vital emergency medical and other relief efforts … [to] combat the impact of the COVID-19 pandemic.”

Global economy on Long Ascent

On Tuesday, Kristalina Georgieva, head of the IMF, said the global economy is coming back from the depths of the coronavirus crisis.

“But this calamity is far from over,” she warned, saying that all countries are now facing “the Long Ascent – a difficult climb that will be long, uneven, and uncertain. And prone to setbacks.”

According to Georgieva, many countries have become more vulnerable as risks remain high, including from rising bankruptcies and stretched valuations in financial markets.

“Their debt levels have increased because of their fiscal response to the crisis and the heavy output and revenue losses,” she said.

“We estimate that global public debt will reach a record-high of about 100% of GDP in 2020.”