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Pakistan to get $1b debt relief from G-20

Pakistan to get $1b debt relief from G-20

ISLAMABAD: The economic affairs ministry has, on Friday, revealed that under the third phase of the Debt Service Suspension Initiative (DSSI) for July-December 2021, Pakistan will get a relief of around $1 billion. 

The initiative of global debt payments suspension has provided relief of around $3.5 billion to Pakistan, one-third of which comes from the friendly neighbor China, reducing immediate borrowing requirements by almost the same amount.

This relief includes a pause on principal loan repayments worth $785 million and the remaining on account of interest repayments.

As per the International Monetary Fund (IMF) staff report, a relief of $2.5 billion has been granted under the first two phases, which have brought the total ease to $3.5 billion under three phases.

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This debt relief is aimed to provide a much-needed fiscal space for lessening the socioeconomic impact of Covid-19 and to meet the urgent health and economic needs of the country. 

As per Federal Minister for Economic Affairs Khusro Bakhtiar, the G-20 finance ministers and governors of the central bank in a joint communiqué have announced a 6-months extension in DSSI from July to December 2021. 

Pakistan has welcomed the announcement.

Pakistan is likely to get a debt suspension of about $1 billion from bilateral creditors under DSSI Phase-III. 

To get the relief, each country will be required to make a request and the government of Pakistan will take a decision after due deliberation.

Pakistan, with 76 other poor African countries, qualified for the G-20 debt relief initiative for May-December 2020 period. This initiative was announced in April last year to mitigate the adverse impacts of the pandemic.

Experts believe that Pakistan has not adequately used its resources to procure coronavirus vaccines. The country still remains far behind regional countries in the drive to vaccinate the people against the virus.

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