PARIS: The Paris Club of creditor countries said on Friday it was giving Pakistan another extension to service its debt so that it can dedicate its resources to combatting the COVID-19 pandemic.
The country has until December to make the payment, the club said in a statement, without releasing a figure.
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Islamabad “is committed to devote the resources freed by this initiative to increase spending in order to mitigate the health, economic and social impact of the COVID-19 crisis,” the statement said.
“The Government of the Islamic Republic of Pakistan is also committed to seek from all its other bilateral official creditors a debt service treatment that is in line with the agreed term sheet and its addendum. This initiative will also contribute to help the Islamic Republic of Pakistan to improve debt transparency and debt management.”
It added that the Paris Club creditors will continue to closely coordinate with non-Paris Club G20 creditors and other stakeholders in the ongoing implementation of the Debt service suspension Initiative (DSSI) and its extension, so as to provide maximum support to beneficiary countries.
The country’s debt amounts to some 90% of its gross domestic product, according to the International Monetary Fund.
Its debt service for the 2021-2022 fiscal year totals $56.9 billion, the IMF says.
Pakistan owes $11.5 billion to the Paris Club, according to the IMF.
Formed in 1956, the Paris Club is an informal group of official creditors whose role is to find coordinated and sustainable solutions to the payment difficulties experienced by borrower countries.
The members of the Paris Club which participate in the reorganisation of Pakistan’s debt are the governments of Austria, Belgium, Canada, Finland, France, Germany, Italy, Japan, the Netherlands, Norway, the Republic of Korea, the Russian Federation, Spain, Sweden, Switzerland, the United Kingdom and the United States of America.
