Pakistan secures another $1 billion debt relief

The global debt payments suspension initiative has provided temporary relief of around $3.5 billion to Pakistan and one-third of the relief has come from China, reducing immediate borrowing requirements by the same amount.

Under the third-phase (July-December 2021) of the Debt Service Suspension Initiative (DSSI) by the G-20 countries, Pakistan will get around $1 billion relief, the economic affairs ministry said on Friday. This includes $785 million worth of pause on principal loan repayments and the remaining on account of interest repayments.

An International Monetary Fund (IMF) staff report has put the relief amount under the first two phases at $2.5 billion. This has brought the total temporary relief to $3.5 billion under three phases.

The debt relief will provide much needed fiscal space for mitigating socioeconomic impact of Covid-19, and meet urgent health and economic needs of the country.