Covid-19: Pakistan secures $1.7 billion debt relief deal from international creditors

ISLAMABAD – Pakistan has signed a $1.7 billion debt rescheduling agreements with international creditors, getting fiscal space for its stressed economy amid COVID-19 pandemic.

Secretary Economic Affairs Division Noor Ahmad expressed that the deal, following months of talks with creditors, was “timely and had helped Pakistan save lives and livelihoods of millions during the difficult COVID-19 times”.

A statement issued by the Ministry of Finance said that Pakistan had entered into negotiations with 21 creditor countries for debt suspension amounting to $1.7 billion after the G20 countries, together with the Paris Club creditors announced the initiative.

"The Government of Pakistan has successfully negotiated and concluded rescheduling agreements with 19 bilateral creditors, including members of the Paris club," read the statement.

Pakistan's dwindling economy suffered more after the government imposed a slew of lockdown restrictions earlier this year, closing major segments of the economy, in order to slow the spread of COVID-19 in the country.

Prime Minister Imran Khan has been repeatedly pushing the international creditors to forgive the debt of poor countries.

Earlier this year, the G20 together with the Paris Club announced a Debt Service Suspension Initiative (DSSI) waiving most debt payments for the world's poorest countries in 2020 in order to help their economies in tough times.

In June, Pakistan was among a handful of countries to get debt relief from the Paris Club in an effort to handle the fallout of the coronavirus pandemic