Sovereign Debt and Financing for Recovery after the COVID-19 Shock: Preliminary Report and Recommendations
Author(s): G30 Working Group on Sovereign Debt and COVID-19
This preliminary report surveys the current state of sovereign debt in emerging market countries, in light of the COVID-19 pandemic. It warns of the prospect of a lost decade of global growth without urgent, concerted, and sustained policy responses, and it calls upon institutional, private, and multilateral creditors to adapt their lending levels and policies to mitigate the risk of significant, long-term economic loss globally.
The report asks the IMF, World Bank, and other conventional creditors to increase their liquidity provision to countries in crisis and enhance their cooperative efforts to maximize the capacity and efficiency of their lending. It also turns to new international lenders such as China, appealing to them to commit their resources to globally-coordinated debt-management efforts. The broad scope of actors identified herein emphasizes the importance of total cooperation in debt management to channel emergency finance toward the provision of public health and resilience measures rather than additional debt repayment. The report additionally highlights the need to flex lending and prudential policy around the unprecedented circumstances presented by COVID-19 to accommodate the enhanced needs of developing and debt-distressed countries. Without the rapid and disciplined implementation of the recommendations outlined in this report, large parts of the world risk falling into a deep and enduring economic trough as a result of the COVID-19 crisis.
To read the full press release on the preliminary report, click here.
To watch the G30 Preliminary Report Launch, please click here.