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The World Bank and the International Monetary Fund on Wednesday urged official bilateral creditors to provide immediate debt relief to the world’s poorest countries as they grapple with severe consequences of the rapidly spreading coronavirus.

In a joint statement, the institutions called on official bilateral creditors to immediately suspend debt payments from International Development Association (IDA) countries, if requested. Those nations, home to a quarter of the world’s population and two-thirds of the world’s population living in extreme poverty, will be hardest hit by the pandemic, they said.

“This will help with IDA countries’ immediate liquidity needs to tackle challenges posed by the coronavirus outbreak and allow time for an assessment of the crisis impact and financing needs for each country,” the IMF and the World Bank said.

Most of the 76 countries receiving IDA support have gross national income per capita of below $1,175, a threshold that is updated annually.

The World Bank and the IMF said suspending debt payments, consistent with national laws of the creditor countries, would provide “a global sense of relief for developing countries” and send a strong signal to financial markets.

They urged the world’s 20 largest economies (G20) to support their call for action.

G20 leaders are due to hold a virtual summit on Thursday to discuss an action plan to deal with the worsening pandemic.

The new coronavirus, which originated in China in December, has infected over 438,000 people around the globe and killed more than 19,000, according to a Johns Hopkins University tally.

The Bank and the IMF invited G20 leaders to assess the crisis impact and financial needs for each of the IDA countries, including identifying those with unsustainable debt situations, and to prepare a proposal for comprehensive action by official bilateral creditors.

They said they would seek endorsement of the proposal at the combined Spring meetings of the Bank and the Fund next month. Meanwhile, leaders from the Group of 20 major economies will convene a video conference on Thursday to discuss the coronavirus epidemic, the Saudi secretariat said, amid criticism that the group has been slow to respond to the global crisis.

G20 finance ministers and central bankers agreed during a separate video conference this week to develop an “action plan” to respond to the outbreak, which the International Monetary Fund expects will trigger a global recession. A subsequent statement offered few details.

A separate statement published late on Tuesday said Saudi Arabia’s King Salman would chair the meeting “to advance a coordinated global response to the COVID-19 pandemic and its human and economic implications.”

IMF Managing Director Kristalina Georgieva has welcomed the fiscal and monetary steps taken by some countries, but said more would be needed, especially in the fiscal arena. Surveys show the pandemic is battering the global economy.

Agathe Demarais, global forecasting director at the Economist Intelligence Unit, said given monetary policy constraints, the G20 countries’ only option to support growth might be fiscal stimulus, but that could raise the risk of a debt crisis, with “devastating effect on global growth.” “This is something that G20 leaders will have in mind if they go for stimulus packages,” Demarais added. Chinese President Xi Jinping will take part in a videoconference of leaders from the Group of 20 major economies on Thursday, Chinese state telelvision reported on Wednesday.

Governments and central banks around the world are ripping up the policy rulebook as they battle to immunise their economies from deeper coronavirus carnage.

Printing new money, gargantuan debt spending, loan guarantees, tax breaks and even direct payments to workers are all in the highly unorthodox mix.

AFP surveys the latest responses by major economies as COVID-19 has spread from China to the rest of the world, making a global recession all but inevitable:

In the United States, Senate leaders and the White House early Wednesday struck agreement on a $2 trillion stimulus package for the world’s largest economy.

The biggest ever spending plan in US history had been knocked back by Democratic objections to the Republican plan, which was decried as a “slush fund” for bosses.

But party leaders overcame their differences to clinch a “wartime level of investment into our nation”, Republican Senate Majority Leader Mitch McConnell said.

Agencies