Good news for Pak economy: breather for one year to pay back loans

Good news for Pak economy: breather for one year to pay back loans

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Prime Minister Imran Khan welcomed on Thursday the debt relief initiatives for developing countries by the G20 nations, the International Monetary Fund (IMF) and the World Bank, including Pakistan providing Pakistan with a one-year breather to pay back loans.

Good news for Pak economy: breather for one year to pay back loans

Imran Khan praised the debt relief initiatives after he was told by Finance Advisor Dr Abdul Hafeez Sheik during a meeting about the IMF’s proposed approval of an additional $1.4 billion in concessional funding to resolve the economic impact of coronavirus.

At its meeting Wednesday in Riyadh’s Saudi capital, the G-20 included Pakistan in the group of countries eligible for debt relief on all principal and interest payments. The World Bank and the International Monetary Fund (IMF) had urged the G20 to extend debt relief to the poorest countries in order to free up their capital to allow them to counter COVID 19.

All debt service due in this timeframe will be bundled into a new loan that will not start payments until June 2022. The loans are due in three years. The G20 countries should meet with the IMF and the World Bank to decide whether or not the suspension duration will be extended to June 2021, based on how the issues related to COVID are formed by then.

Meanwhile, Foreign Minister Shah Mahmood Qureshi welcomed Thursday’s decision by the G-20 countries to grant substantial relief to 76 developing countries as a ‘historic’ gesture that the relief should be inclusive and without ‘onerous conditions.’ The announcement comes as Pakistan faces almost 7,000 confirmed cases of coronavirus, with more than 100 deaths.

All bilateral official creditors must be part of this new program, which is seeing $20 billion in immediate funding to fund developing nations’ health systems. Pakistan has also called for international solidarity and has asked US President Donald Trump to reconsider his decision to withdraw WHO funds.

“It’s my personal point of view, but I think they should reconsider it, as this is a time for us to unite and put our heads together. At the moment, the WHO has many commitments. Cutting off their funds will only add to their burden,” he said. This particular debt relief from the G-20 relates to all principal and interest payments from 1 May and will continue until 1 Dec 2020,