Prioritize pandemic relief, recovery: No time for debt buybacks

SYDNEY and KUALA LUMPUR: Developing-country governments are being wrongly advised to use its modest fiscal resources to pay down accumulated debt instead of strengthening pandemic relief and recovery. Thus, debt phobia risks deepening and extending coronavirus recessions by prioritizing buybacks.

Nearly half (44 percent) of low-income countries were already debt-distressed or at high risk even before the coronavirus pandemic was declared in March 2020. Limited fiscal space has constrained developing countries’ relief and recovery measures, making them far more modest than those of developed countries.