Joint IMF-WBG Staff Note: DSSI Fiscal Monitoring Update

Policy Papers, September 16, 2021

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The COVID-19 pandemic put significant pressures on fiscal accounts during 2020 through a contraction of revenues and increased spending needs to tackle the pandemic and its economic fallout.
Countries benefitting from the Debt Service Suspension Initiative (DSSI) faced difficult choices to reprioritize spending, especially capital spending, even as they allowed higher overall fiscal deficits.
This note summarizes the findings from the update of the fiscal monitoring system for the COVID-19 Debt Service Suspension Initiative (DSSI).

The DSSI was endorsed by the G20 Finance Ministers on April 15, 2020.
The DSSI was extended twice: in October 2020 (until end-June 2021) and in April 2021 (until end-2021).
During May–December 2020 (the first phase), 43 countries participated.
42 countries have formally requested their participation in the initiative during January–June 2021 (the second phase, as of July 30, 2021).

Revenues contracted in 2020 while spending needs increased to address the pandemic and its economic fallout.
Beneficiary countries reprioritized spending, with particular reductions or constraints on capital spending.
Countries allowed higher overall fiscal deficits to respond to the crisis while managing the trade-offs between current emergency spending and capital investment.