G20 finance leaders urge collective decisions to support world economy

The group is committed to minimise social and economic damage on the world economy from the pandemic

The G20 leaders' virtual meeting in March. The average GDP in of the world's largest eocnomies contracted 3.4% in the first quarter of the year as a result of the impact of Covid-19. EPA  

Financial policymakers of the world's 20 largest economies have formulated an action plan to deal with the Covid-19 crisis and are committed to formulate policies that will support their citizens and businesses.

“We, the G-20 members, must act collectively and decisively to protect and support our citizens and businesses, prevent long-term damage and lift restrictions as soon as our health conditions permit,” the group said in a statement late on Thursday evening.

“For economies to recover, it is very important that G20 members take steps to lift restrictions once it is safe, in coordination as necessary and in a manner that is fully in line with health goals,” the G20 statement following a virtual meeting of its finance ministers and central bank governors, said.

The coronavirus pandemic, which has infected more than 2 million people worldwide and killed close to 140,000, has nearly shuttered travel and led to temporary closure of non-essential businesses as countries enforced lockdowns and restricted movement. The outbreak has also pushed the world economy into the worst recession since the Great Depression in the 1930s.

The G20 said that all finance ministers have a clear role to play in controlling the pandemic and ensure all healthcare initiatives are funded.

“There is an urgent need to strengthen cooperation and increase funding to support and accelerate research and development related to diagnosis, treatment and vaccines. We will work closely with health and G20 ministers to support the availability of essential medical supplies and medicines.”

The G20 has so far poured $7 trillion (Dh25.7tn) into the global economy to support businesses and stem job losses.

The group has agreed to provide debt relief to the world’s poorest countries, allowing them to dedicate funds to fight the pandemic instead. Both principal repayments and interest payments will be suspended from May 1 until the end of the year. The G20 has also asked private creditors to join the initiative "on comparable terms".

The initiative accommodates all International Development Association-countries that are currently on any debt service plan to the International Monetary Fund and the World Bank. All of the least developed nations, as defined by the UN, will also benefit, and creditors will consider a possible extension to the debt freeze later this year.

“We will continue to provide support to minimise the economic and social damage caused by the pandemic, restore global growth, maintain market stability and enhance resilience, including through job support and household income,” the G20 said.