Question to the Department for International Development:

To ask the Secretary of State for International Development, what assessment she has made of the effect of increasing national debt on the financial stability of developing nations affected by the covid-19 pandemic.

The UK Government is deeply concerned by the impact of the Covid-19 crisis on developing countries. The IMF recently forecast that debt-to-GDPs ratios will rise by 5.1 percentage points in low income developing countries in 2020. In Africa, this figure is 7.3 percentage points. Higher debt will impact on future growth, resilience and poverty reduction prospects, particularly in those countries which entered the crisis at high risk of debt distress.

In response to the crisis, the UK, alongside the G20 and the Paris Club of official creditors, has committed to a temporary suspension of debt service repayments from the poorest countries. This official sector effort could provide up to $12bn of additional fiscal space until the end of the year, allowing countries to redirect finances towards mitigating the health and economic impacts of Covid-19. This initiative will help preserve financial stability in the poorest and most vulnerable countries whilst providing time to assess what future support is required.