Pakistan hopes to get $1bn debt relief from G-20

Islamabad: Pakistan is hoping to get around $1 billion relief from G-20, the economic affairs ministry said. It will include $785 million worth of pause on principal loan repayments and the remaining on account of interest repayments.

The G-20 finance ministers and central bank governors in a joint communiqué recently announced a final 6-month extension through December 2021 in Debt Service Suspension Initiative (DSSI) to help developing countries deal with the coronavirus pandemic.

The debt relief will provide much needed fiscal space to mitigate the socio-economic impact of the COVID-19 pandemic and meet the urgent economic needs of the country, said Federal Minister for Economic Affairs Khusro Bakhtiar.

Pakistani officials are looking for debt suspension of about $900 million to $1 billion from bilateral creditors under DSSI Phase-III and would submit a formal request for relief after discussion within the relevant ministries.

Pakistan along with other developing countries had qualified for the G-20 debt relief initiative, announced in April last year to combat the adverse impacts of the pandemic. The global debt payments suspension initiative has provided temporary relief of around $3.5 billion to Pakistan, according to local media reports.

On March 30, Pakistan received nearly $500 million from the International Monetary Fund (IMF) after the $6 billion IMF loan programme resumed.