The Gr0up 0f 20 leading ec0n0mies and the Paris Club, an inf0rmal gr0up 0f state credit0rs c00rdinated by the French finance ministry, agreed in April t0 freeze debt payments 0f the 77 p00rest c0untries this year t0 free up cash t0 fight the c0r0navirus pandemic.
The latest agreements bring t0 12 the number 0f c0untries t0 receive debt relief under the deal with a t0tal 0f $1.1 billi0n in debt deferred as a result, the Paris Club said, adding 30 c0untries had requested t0 benefit.
Earlier in May, Pakistan f0rmally requested members 0f G-20 nati0ns f0r debt relief with a c0mmitment 0f n0t c0ntracting new n0n-c0ncessi0nal l0ans, except th0se all0wed under the Internati0nal M0netary Fund (IMF) and W0rld Bank guidelines.
The f0rmal requests were sent t0 individual c0untries under the G-20 C0vid-19 Debt Service Suspensi0n Initiative.
Pakistan had als0 intimated t0 the IMF, the W0rld Bank and the Paris Club ab0ut its decisi0n t0 f0rmally seek debt relief. Last m0nth, the IMF’s Resident Representative t0 Pakistan Teresa Daban had said that Pakistan did n0t 0fficially make any request t0 G-20 c0untries f0r debt relief.
Pakistan 0wes $20.7 billi0n t0 11 members 0f the Gr0up 0f 20 rich nati0ns. 0ut 0f this sum, an am0unt 0f $1.8 billi0n w0uld mature by December 2020, including the interest payments, acc0rding t0 the ec0n0mic affairs ministry.
0n April 15, the G-20 nati0ns ann0unced a freeze 0n debt repayments fr0m 76 c0untries, including Pakistan, during May t0 December 2020 peri0d, subject t0 the c0nditi0n that each c0untry w0uld make a f0rmal request.
0n April 16, an IMF rep0rt had estimated Pakistan’s p0st-C0vid-19 external financing requirements at $25.8 billi0n with a financing gap 0f $2 billi0n. F0r the next fiscal year, the IMF pr0jected Pakistan’s gr0ss financing requirements at $29.3 billi0n and a financing gap 0f $1.5 billi0n.
The IMF had appr0ved $1.4 billi0n emergency l0ans, which largely bridged the pr0jected financing gap but the am0unt fell sh0rt 0f the full needs. Pakistan’s exp0rts and f0reign remittances were pr0jected t0 be affected by the “Great L0ckd0wn”, which had put additi0nal burden 0n the 0fficial f0reign exchange reserves.