New Delhi, Delhi, India

As the coronavirus pandemic has caused the global economy into a severe recession, the Group of 20 nations on Wednesday announced a one-year standstill for world's poorest countries in a bid to give them some respite from its ongoing struggle with the virus outbreak. 

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The G20 also reiterated its commitment to using "all possible tools" to tackle the health and economic crisis caused by COVID-19. 

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The G20 finance ministers and central bankers agreed on "a time-bound suspension of debt service payments for the poorest countries," and in the communique after their virtual meeting, said, "All bilateral official creditors will participate in this initiative." 

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Saudi Finance Minister Mohammed Al-Jadaan, who currently heads the group, said this means "poor countries don't need to worry about repaying over the course of the next 12 months."

The move will "provide north of $20 billion of immediate liquidity" for poor countries to use "for their health system and support their people facing COVID-19," Al-Jadaan said in a press briefing.

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He also said that the G20 officials are committed to "further support the world as it faces this pandemic". 

The International Monetary Fund and World Bank had been urging the governments to provide debt relief to the countries most in need, and finance ministers from the Group of Seven developed economies agreed to do so on Tuesday. 

The IMF and World Bank praised the announcement, describing it "a powerful, fast-acting initiative that will do much to safeguard the lives and livelihoods of millions of the most vulnerable people."

Both the international lending organisations have rushed to roll out emergency financing and received air requests from more than 100 countries. 

The IMF has called the current economic crisis the "Great Lockdown," warning that it will cut $9 trillion off global growth as the global economy contracts by three per cent this year, the worst since the Great Depression in the 1930s. 

It estimates that 20 governments already have committed nearly $8 trillion towards fighting the virus and providing economic relief to households and companies struggling to weather the crisis.

As the "pandemic continues its deadly march around the world," how much more will "depend on how effective measures are, and how quickly the virus retreats," IMF chief Kristalina Georgieva said.

(With AFP inputs)