Saudi Arabia led the major economies of the G20 on Saturday in pledging to use “all available policy tools” to combat the coronavirus pandemic and boost the global economy, Arab News reported.
After a virtual meeting hosted by Riyadh, the group’s finance ministers and central bank chiefs said the global economy would recover as countries reopened after virus lockdowns, but further actions were needed to ensure growth.
“We are determined to continue to use all available policy tools to safeguard people’s lives, jobs and incomes, support global economic recovery, and enhance the resilience of the financial system, while safeguarding against downside risks,” they said in a statement.
They said they will consider widening debt relief for coronavirus-hit poor countries in the second half of 2020.
The world’s 20 most industrialized nations announced a one-year debt standstill for the world’s poorest nations in April, but campaigners have criticized the measure as grossly inadequate to stave off the knock-on effects of the pandemic.
World Bank president David Malpass called for the debt suspension initiative to be extended through the end of 2021, while multiple charities including Oxfam said it needs to be stretched through 2022 to avert a “catastrophe for hundreds of millions of people”.
G20 finance officials said 42 of the world’s 73 poorest countries had asked for a freeze in debt repayments until the end of the year, amounting to about $5.3 billion in deferred payments.
Any extension of the initiative will be based on how the pandemic develops and recommendations of the International Monetary Fund and World Bank that will be submitted to G20 members in advance of their meeting in October, it added.
Saturday’s talks, chaired by Saudi Finance Minister Mohammed Al-Jadaan and central bank governor Ahmed Al-Kholifey, came as the surging pandemic continues to batter the global economy and campaigners warn of a looming debt crisis across poverty-wracked developing nations.
Al-Jadaan said: “We encourage the private sector investors to participate in this, but we need to be very careful not to interfere in private agreements.”
Downgrading its growth forecasts, the IMF last month said it expected global GDP to fall by 4.9 percent this year due to a deeper contraction during lockdowns than previously anticipated.
“Due to the continuing impact of the COVID-19 pandemic, the global economy faces a deep recession this year, with partial and uneven recovery expected in 2021,” Kristalina Georgieva, the IMF’s managing director, said in a statement after the meeting. “We need to unite to help the poorest and most vulnerable economies, especially those struggling with high debt… The G20’s debt service suspension initiative has been commendable and I hope that consideration will be given to extending it.”
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