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World Bank chief expects G20 to extend debt payment freeze through end-2021

Andrea Shalal
·2-min read
FILE PHOTO: World Bank President David Malpass attends the "1+6" Roundtable meeting at the Diaoyutai state guesthouse in Beijing

By Andrea Shalal

WASHINGTON (Reuters) -World Bank President David Malpass said on Monday he expects China, the United States and other Group of 20 major economies to extend a freeze in bilateral debt service payments through the end of 2021 when they meet this week.

The G20 Debt Service Suspension Initiative had already helped countries defer some $5 billion in payments through the end of 2020, with another $7.3 billion in deferred payments expected through June, Malpass told reporters.

Extending the debt payment freeze through year-end would save even more money that countries could use to combat the COVID-19 pandemic and support their economies, he said, but gave no specific estimate.

He said G20 members would probably stipulate that such an extension would be the "last or final" one offered.

While the temporary freeze in debt payments would help, Malpass said "actual debt relief" would be needed in the longer-term to allow the poorest countries to reduce their unsustainable debt burdens to a more moderate level.

Malpass said China - the world's largest official bilateral creditor, by far - had shown receptivity to international engagement on the need for greater transparency, as seen in G20 discussions on the issue in 2020, but more work was needed.

"We're making some progress, but I think much more needs to be made," Malpass said during a roundtable at the start of the spring meetings of the World Bank and the International Monetary Fund.

Malpass said the World Bank's top priority was replenishing the resources of the International Development Association, its arm for assisting the poorest countries, which it aims to achieve by December.

There could also be scope for a selective capital increase to address specific needs resulting from the pandemic, he said.

(Reporting by Andrea ShalalEditing by Peter Graff)