Pakistan seeks additional US$ 1.2 billion debt relief from G-20

Pakistan seeks an additional debt relief of around US$ 1.2 billion from G-20 as part of the debt relief initiative aimed at assisting developing countries amid COVID-19 pandemic.

Pakistan on Thursday, signed a loan financing agreement with World Bank (WB) worth up to US$ 1.15 billion. The agreement signing ceremony was also attended by Prime Minister Imran Khan.

According to sources within Ministry of Economic Affairs, Pakistan is expected to receive moratorium on $950 million principal repayments and $200 million interest payments.

It is pertinent to know that Pakistan, under G-20 COVID-19 Debt Service Suspension Initiative; has already applied for hiatus on loan payments worth up to US$ 2 billion to 11 G-20 states.

Pakistan’s total debt relief amounts to around US$ 3.2 billion, whereas country’s total debt to these 11 G-20 nations is said to be around US$ 20.7 billion.

The development comes as G-20 states had announced a temporary respite in loan payments for 76 countries for May-December 2020.

 Meanwhile, according to a communique issued by Saudi Arabia, another loan payment hiatus of around six-months might be issued, whereas the World Bank had earlier asked for a 12-month extension – a request turned down by the G-20 states.

According to World Bank, the total debt of poor countries eligible for debt relief initiative stands at US$ 744 billion.