Crisis-ridden Pakistan will get $800 million debt reduction from G20 international locations: Report


Islamabad: Cash-strapped Pakistan has secured $800 million value of debt freeze offers from 14 members of the G20 whereas it was nonetheless awaiting ratification by the remaining six international locations of the grouping, together with Saudi Arabia and Japan, in accordance with a media report on Sunday.

Pakistan owes $25.four billion to the Group of 20 wealthy nations as of August this yr. On April 15, the G-20 nations introduced a freeze on debt repayments from 76 international locations, together with Pakistan, throughout May to December 2020 interval, topic to the situation that every nation would make a proper request.

Pakistan together with 76 different poor African international locations had certified for the G-20 debt reduction initiative, introduced in April this yr for May-December 2020 interval, to fight the adversarial impacts of the COVID-19 pandemic.

During the previous seven months 14 international locations ratified their agreements with Pakistan, which has supplied fiscal house of $800 million to Islamabad in the interim, The Express Tribune reported, quoting authorities sources as saying.

“Pakistan has not yet finalised the debt rescheduling modalities with Japan, Russia, Saudi Arabia, UAE and the UK.”

— Pak Debt

In addition to those 14 nations, two different international locations had additionally approached to increase debt reduction to Pakistan.
According to official paperwork, Pakistan has not but finalised the debt rescheduling modalities with Japan, Russia, Saudi Arabia, United Arab Emirates and the United Kingdom.

Although these six international locations haven’t but ratified the debt reduction associated agreements, these G-20 members are anticipated to conclude the deal earlier than finish of subsequent month, stated a senior official of the Ministry of Economic Affairs.

He stated that Pakistan was not making repayments to those six international locations too, on the understanding that these members would ultimately sign-off the offers.

Pakistan was anticipating a complete $1.eight billion non permanent debt reduction from the members of G-20 nations for May-December 2020 interval, in accordance with the Ministry of Economic Affairs. This included $1.47 billion principal loans repayments and $323 million curiosity on the loans.

The financial affairs ministry’s estimates had proven that Pakistan can get $613 million value of non permanent reduction from Saudi Arabia, $309 million from China, $23 million from Canada, $183 million from France, $99 million from Germany, $6 million from Italy, $373 million from Japan, $47 million from South Korea, $14 million from Russia, $1 million from the UK and $128 million from the US.

So far, Pakistani authorities have entered into 27 debt rescheduling agreements with about 16 international locations, the report stated.

The most reduction was anticipated from Saudi Arabia to the tune of $613 million for May-December interval, it stated. Japan was additionally anticipated to supply $373 million reduction. However, agreements with these nations have been nonetheless pending the ultimate nod.

Russia can also be anticipated to ratify the revised phrases by finish of subsequent month, which as soon as ratified may present non permanent reduction of $14 million, the report stated.

Saudi Arabia has additionally not prolonged the $three billion monetary help package deal and has already prematurely withdrawn $1 billion that Pakistan paid again by arranging one other mortgage from China. Pakistan may payback $1 billion subsequent month to the oil-rich kingdom, a yr forward of Pakistan’s expectations.

Meanwhile, the Economic Coordination Committee of the Cabinet on Friday accepted to make one other formal request to the G-20 nations for extension in debt reduction initiative for one more six months, the report stated.

This time, the Ministry of Economic Affairs has estimated that Pakistan can doubtlessly get reduction of $915 million, together with $273 million in curiosity funds throughout January-June 2021 interval.

The most reduction of $385 million is predicted from China, adopted by $211 million from Japan, $104 million from France, $53.6 million from Germany, $65 million from the US, $12 million from Saudi Arabia, $7 million from Russia and half one million greenback from the UAE.

In case, Japan and Saudi Arabia additionally delay the reduction beneath the second part, the online advantages could come right down to $685 million within the second part, stated the sources.

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