Joint IMF-WBG Staff Note - Implementation and Extension of the Debt Service Suspension Initiative - Executive Summary

Jul 19, 2026

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Joint IMF-WBG Staff Note analyzes how the Debt Service Suspension Initiative (DSSI) has supported the world’s poorest countries during the COVID-19 crisis through rapid, coordinated relief from official bilateral creditors. It summarizes the initiative’s effectiveness since its May 1, 2020 start, including progress on transparency of public debt and improved data sharing. The note recommends extending the DSSI for up to one year, with a midpoint review, to address ongoing financing pressures and liquidity needs through 2021. It also proposes modifications to broaden participation, standardize procedures and memoranda, strengthen disclosure requirements, and improve repayment flexibility, while highlighting the need for timely debt resolution for unsustainable cases.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages47

Reading Time1 h 58 min

Executive Summary

COVID-19 impacts on poorest countries

DSSI outcomes and transparency progress

Recommended extension and review approach

Key modifications to improve effectiveness

Debt resolution for unsustainable cases

Public Disclosure Authorized Public Disclosure Authorized DEVELOPMENT COMMITTEE (Joint Ministerial Committee of the Boards of Governors ofthe Bank and the Fundon the Transfer of Real Resources to Developing Countries) DC2020-0007 October 16, 2020 Joint IMF-WBG Staff Note: Implementation and Extension of the Debt Service Suspension Initiative Attached is the document titled “Joint IMF-WBG Staff Note: Implementation and Extension of the Debt Service Suspension Initiative” prepared by the World Bank Group and International Monetary Fund for the virtual October 16, 2020 Development Committee Meeting. September 28, 2020 IMPLEMENTATION AND EXTENSION OF THE DEBT SERVICE SUSPENSION INITIATIVE EXECUTIVE SUMMARY The COVID-19 pandemic is heavily impacting the world’s poorest countries. Economic activity in the poorest countries is expected to drop about 2.8 percent in 2020. The pandemic spread to these countries has lagged contagion in advanced economies and emerging markets, but some countries have seen a rapid surge. Health challenges may rise and containment measures have come at an economic cost. Overall, the crisis could push 100 million people into extreme poverty and raise the global poverty rate for the first time in a generation. The Debt Service Suspension Initiative (DSSI) has enabled a fast and coordinated release of additional resources to beneficiary countries to bolster their crisis mitigation efforts. It was endorsed by the G20 Finance Ministers in April 2020 and became effective on May 1, 2020. As of end-August, 43 countries are benefitting from an estimated US$5 billion in temporary debt service suspension from official bilateral creditors, accounting for more than 75 percent of eligible official bilateral debt service under the DSSI in 2020. The DSSI supported substantial COVID-19 related spending as participating countries faced major revenue shortfalls. The DSSI has also allowed to make significant progress in enhancing transparency of public debt to help borrowing countries and their creditors make more informed borrowing and investment decisions. The World Bank has published detailed external public debt data by creditor group and potential debt service suspension amounts from DSSI for borrowing countries, facilitating data sharing and coordination among creditors. An extension of up to one year of the DSSI is recommended in view of the continuing financing pressures on the beneficiary countries owing to the pandemic, with the second six months subject to confirmation in a mid-term review, in view of the need for broader participation by commercial and official bilateral creditors. More than half of all DSSI participants are assessed to be at high risk of debt distress or already in debt distress according to debt sustainability analysis as of mid-August 2020. Fiscal monitoring indicates that DSSI participating countries are undertaking substantial COVID-19 related spending even as they face major revenue shortfalls. Analysis based on WEO projections shows that liquidity support will remain essential throughout 2021. A timely decision to extend the DSSI would help countries plan and reap the full benefits of the initiative. Some modifications of the DSSI are recommended: • First, the DSSI should be extended by up to one year, given the depth of the crisis and elevated financing needs, subject to a midpoint review, with some possible amendments to the April term sheet as discussed below. A timely decision to extend the DSSI, which enables requests for DSSI in 2021 to come even before end 2020, together with adopting common procedures for country requests and other communications that ensure the IMF-WBG are fully informed about any delays in processing DSSI requests, would allow requesting countries to fully benefit from DSSI. • Second, to maximize much needed support to eligible countries, all official bilateral creditor institutions, including national policy banks, should

FAQs

What problem does the DSSI address during the COVID-19 pandemic?

The DSSI provides temporary suspension of debt service for eligible countries, freeing resources to support crisis mitigation while revenues fall sharply.

How many countries and how much debt service suspension were reported by end-August (as stated in the executive summary)?

As of end-August, 43 countries were benefiting from an estimated US$5 billion in temporary suspension from official bilateral creditors.

What extension is recommended for the DSSI, and what conditions are proposed?

The note recommends extending the DSSI for up to one year, subject to a midpoint review, with the second six months to be confirmed in a mid-term review.

Jul 19, 2026

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