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G20 finance ministers to discuss $5tn virus package, debt relief for developing economies

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G20 finance ministers to discuss $5tn virus package, debt relief for developing economies

g20 finance ministers coronavirus
Photo: Reuters/Issei Kato

Finance ministers from the G20 will meet today over video conference to discuss the best course of action to address the economic downturn caused by COVID-19.

In the face of a recession, the G20 has already pledged to spend $5 trillion to mitigate the effects of job losses and industry shutdowns and has urged international financial institutions to alleviate the burden on developing countries.

These efforts will likely culminate in a debt forgiveness system in which the IMF will agree to freeze debt service payments in return for developing countries’ investment in their own crisis management. Firms are more likely to receive their payments if the developing world can quickly regain its footing. The main impediment to these initiatives will be corruption, which often debilitates the countries most in need of assistance.

Within the G20, expect trade restrictions and tariffs to be eased as the world tries to power the collective economy to the fullest degree. An OPEC+ deal on stabilising oil prices may inspire a similar degree of global economic cooperation. Moreover, many countries have ensured expedited health information and technology as they consolidate global efforts to find a vaccine.

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