G20 finance ministers and central bankers have agreed to extend a moratorium on debt interest payments for the poorest countries, which could lag behind the global recovery from the coronavirus pandemic.
In an online meeting on Wednesday, the Group of 20 most powerful nations also backed the International Monetary Fund’s plan to boost its reserve offerings to help impoverished nations, and pledged to reach a deal on global tax reform by the middle of the year.
“We will further step up our support to vulnerable countries as they address the challenges associated with the COVID-19 pandemic,” the G20 ministers said in a statement.
The IMF has forecast faster than expected global economic growth this year, of 6%, after the pandemic in 2020 caused the worst peacetime downturn since the Great Depression.
But US Treasury Secretary Janet Yellen has warned of the risk that the crisis reverses years of progress in fighting poverty and closing the gap between poor and rich nations.
The G20 said the debt moratorium, which was introduced in April last year and extended in October until June 30, would be prolonged one more time until December.
“This final extension will allow beneficiary countries to mobilise more resources to face the challenges of the crisis and, where appropriate, to move to a more structural approach to address debt vulnerabilities,” its statement said.