'Cash-strapped Pakistan secures $800 mn in debt relief from G20 nations'

Islamabad: Cash-strapped Pakistan has secured $800 million worth of debt freeze deals from 14 members of the G20 while it was still awaiting ratification by the remaining six countries of the grouping, including Saudi Arabia and Japan, according to a media report on Sunday.

Pakistan owes $25.4 billion to the Group of 20 rich nations as of August this year. On April 15, the G-20 nations announced a freeze on debt repayments from 76 countries, including Pakistan, during May to December 2020 period, subject to the condition that each country would make a formal request.

Pakistan along with 76 other poor African countries had qualified for the G-20 debt relief initiative, announced in April this year for May-December 2020 period, to combat the adverse impacts of the COVID-19 pandemic.

During the past seven months 14 countries ratified their agreements with Pakistan, which has provided fiscal space of $800 million to Islamabad for the time being, The Express Tribune reported, quoting government sources as saying.

In addition to these 14 nations, two other countries had also approached to extend debt relief to Pakistan. According to official documents, Pakistan has not yet finalised the debt rescheduling modalities with Japan, Russia, Saudi Arabia, United Arab Emirates and the United Kingdom.

Although these six countries have not yet ratified the debt relief related agreements, these G-20 members are expected to conclude the deal before end of next month, said a senior official of the Ministry of Economic Affairs. He said that Pakistan was not making repayments to these six countries too, on the understanding that these members would eventually sign-off the deals.

Pakistan was expecting a total $1.8 billion temporary debt relief from the members of G-20 nations for May-December 2020 period, according to the Ministry of Economic Affairs. This included $1.47 billion principal loans repayments and $323 million interest on the loans.