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G20 finance chiefs hold teleconference on coronavirus pandemic

Kyodo

Finance chiefs from the Group of 20 advanced and emerging countries held a videoconference Saturday evening to share their recognition of the economic situations caused by the coronavirus pandemic and potential policy measures against it.

Finance Minister Taro Aso and Bank of Japan Gov. Haruhiko Kuroda joined the videoconference, with debt relief for developing countries on the agenda, a Japanese government official said.

Finance ministers and central bank governors from the G20 were also likely to discuss new international taxation rules for companies operating in the digital space, as well as issues regarding the introduction of digital currencies and the empowerment of women and youth, the official said before the teleconference.

The talks come amid growing uncertainty about a global economic recovery from the virus as the spread of COVID-19 worldwide shows no signs of waning. Infections have already topped 14 million, according to a tally by Johns Hopkins University.

At the previous virtual meeting in April, the G20 finance chiefs said they had agreed with the "Paris Club" countries — traditional lenders like the G7 who lend to developing countries — to suspend debt payments by "the poorest countries" from May 1 through the end of the year.

Amid mounting concern about capital outflows from emerging economies, the G20 nations added that the creditors "will consider a possible extension" during the year.

The ratio of the 59 poorest countries' outstanding obligations to China to the sum of their gross domestic products came to 11.6 percent in 2016, or about four times that owed to the Paris Club nations, according to an IMF report in 2018.

In a statement released after the April talks, the G20 also pledged to "use all available policy tools" to underpin the economy and maintain financial stability, while tracking the implementation of their action plan and updates in July.

The G20 finance chiefs were originally to hold a two-day meeting from Saturday in Jeddah, Saudi Arabia, but that was switched to a teleconference due to the pandemic. The next talks are scheduled for Oct. 15 to 16 in Washington on the sidelines of the International Monetary Fund and the World Bank Group's annual fall gatherings.

In reports last month, the IMF projected the world economy will contract 4.9 percent this year and the World Bank projected a shrinkage of 5.2 percent, with the pandemic triggering the worst global recession since the Great Depression in the 1930s.

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