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Pakistan gets debt relief from G20 countries amid coronavirus crisis

Pakistan gets debt relief from G20 countries amid coronavirus crisis

ISLAMABAD: Pakistan has received major debt relief from G20 countries amid coronavirus pandemic as the international forum agreed to postpone loan payments for the developing nations, citing sources.

The G20 countries have provided a major relief to Pakistan by postponing debt payment worth $12 billion in the current fiscal year and approved the time period up to 2.5 years for the payments of loan instalments and interest, said sources.

After getting the relaxation in loan payments to the international financial institutions including International Monetary Fund (IMF) and Asian Development Bank (ADB), the Ministry of Finance’s Debt Division commenced the compilation of relief plan which will come into effect from May 2020.

Sources added that no payments will be made to the World Bank, Paris Bank and Islamic Development Bank (IDB) as Islamabad has been given time for debt payments till June 2022. It emerged that the plan will also be applicable on mutual commercial loan payments of the G20 countries.

Pakistan is due to clear debt payments of $5 billion to Saudi Arabia and the United Arab Emirates (UAE), as well as $3.4 billion to China.

It is pertinent to mention here that Prime Minister Imran Khan had called for a ‘Global Initiative on Debt Relief’ for developing countries amid coronavirus crisis on April 12 in order to ‘promote coordinated health and economic response’.

PM Imran Khan appealed the international community in a video message for taking an initiative on debt relief for the developing countries and also invited United Nations (UN) Secretary-General António Guterres to work with him in advancing the objectives of a coordinated response.

Later on April 15, with the global economy plunged into the worst recession in a century, the Group of 20 nations had announced a one-year debt standstill for the world’s poorest nations as they struggle to deal with the coronavirus pandemic.

The G20, which brings together the world’s largest economies, also reiterated the pledge to deploy “all available policy tools” to deal with the health and economic crisis caused by COVID-19.