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Poorest countries in desperate need of support: World Bank

The global economy is experiencing a K-shaped recovery, as advanced economies have been able to provide support while the poorest countries are facing an increasingly desperate recession, World Bank Group President David Malpass said.

"What we're seeing so far is sometimes described as a K-shaped recovery," Xinhua news agency quoted Malpass as saying at a virtual press conference on Wednesday on the sidelines of the annual meetings of the World Bank Group and the International Monetary Fund (IMF).

"That means the advanced economies have been able to provide support, especially for their financial markets and for people that have jobs that can be done by working from home," he said.

But for the developing countries, especially the poorest developing countries — the downward leg in the K — people are facing an increasingly desperate recession, "because of the loss of jobs, the loss of income, and also the loss of remittances coming from workers working outside the country", the World Bank chief said.

Malpass highlighted the significance of the G20 debt relief program, saying that there's been progress both in terms of fiscal benefits and also transparency benefits.

In April, the G20 endorsed the Debt Service Suspension Initiative (DSSI) to help the poorest countries manage the impact of the pandemic, allowing them to suspend payments on official bilateral debt until the end of 2020.

In a virtual meeting earlier on Wednesday, G20 finance ministers and central bank governors agreed to extend the DSSI by another six months, and to examine by April 2021 if the economic and financial situation requires further extension.

Malpass further said he would propose a $25 billion supplemental Covid-19 emergency financing package to support most indebted IDA countries, the poorest countries drawing on the World Bank's International Development Association..