COVID-19 is projected to bring about a 4.7% output contraction in 2020. This is partly the result of the looming deep recession in the Euro area. Virus containment measures will also lead to weaker domestic demand. Markedly wider fiscal deficits could intensify debt sustainability concerns.

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.