G20 Debt Service Suspension Initiative (DSSI) calls on creditors to freeze debt repayments for poorest nations upon request; External debt in DSSI-eligible countries tops $750 billion, $510 billion of which is long-term external public sector debt; DSSI-eligible countries face external debt service payments of some $140 billion in 2020

Emerging markets are being hit by a combination of macro shocks. The key challenge is to avoid medium-term growth being impacted. A way to accomplish this is to use available monetary and fiscal space. Flexible exchange rates can and should act as automatic stabilizers. As COVID-19 continues to spread, we worry that more will be needed.

The April edition of the Insurance Update provides targeted updates on IIF insurance activities and events, and highlights relevant IIF publications or related regulatory developments in other fields. 

The OPEC+ bloc agreed to cut oil production by a record 9.7mbd. Assuming full compliance, we expect Brent crude to average $40/bbl in 2020. Cuts will last through April 2022, at lower levels. Major non-OPEC+ producers will cut by up to 3.5mbd. Inventories should peak in Q2 and then drop in H2. 

COVID-19 has affected Latin America through multiple channels. Pre-existing challenges and increased exposure put the region in a difficult position. We project a deep recession this year amid a sudden stop in capital flows and limited policy space. 

As public health restrictions wear on, market assess how stimulus and support measures might shape the recovery; ESG-friendly equities and corporate bonds continue to outperform their peers in major global markets, including the U.S.; ESG-dedicated ETFs saw net inflows of over $3.7 billion in March, with a strong upswing in early April; A sustainable way to finance COVID-19 costs: social bond issuance has surged to near $7 billion in early April

We revise global GDP growth in 2020 down significantly to -2.8%. This means that the COVID-19 shock is worse than the GFC in 2009. The IIF’s tracking of portfolio flows shows an unprecedented outflow. Our projections show some risk of further outflows in the 2^nd quarter.

EM funding needs are still high despite current account adjustment.

The COVID-19 shock has led to a pronounced sudden stop in EM. Out short-term portfolio tracker shows record outflows in 2020Q1. We expect a modest recovery in capital flows in the 2^nd half of 2020. Nevertheless, capital flows to EM will be much weaker than in 2019. Given uneven EM policy space, multilateral support will be needed.

The focus of this Staff Paper is on how new ECL standards work, how they introduce procyclicality under deteriorating credit conditions, and what actions and guidance regulators and accounting standard-setting bodies have issued to help avoid excessive procyclicality in the current crisis. 

Global debt across all sectors rose by over $10 trillion in 2019, topping $255 trillion. At over 322% of GDP, global debt is now 40 percentage points ($87 trillion) higher than at the onset of the 2008 financial crisis—a sobering realization as governments worldwide gear up to fight the COVID-19 pandemic.