Cash-strapped 'Naya Pakistan' eyes $1 billion debt relief from G-20

Imran Khan-led Pakistan government is expected to get another $1 billion relief in loans this year from the G20, reported the Express Tribune. 

Pakistan’s Economic Affairs Ministry said the relief would be covered under the third phase of the G20’s Debt Service Suspension Initiative.

The Islamic Republic will receive this debt relief under the third phase of the Debt Service Suspension Initiative (DSSI) by the G20 countries.

It will include $785 million worth of pause on principal loan repayments and the remaining on account of interest repayments, reported Gulf News.

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.

The G20 finance ministers and central bank governors in a joint communique recently announced a final six-month extension through December 2021 in Debt Service Suspension Initiative (DSSI) to help developing countries deal with the coronavirus pandemic, reported Gulf News.

DSSI is the initiative for a time-bound suspension of loan repayments (of both principal and interest) for countries that request it. 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 G20 debt relief initiative, announced in April last year to combat the adverse impacts of the pandemic, reported Gulf News.

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, reported Gulf News. 

(With inputs from agencies)