Pakistan finally gets debt relief from Paris Club after months of meetings and negotiations among bilateral lenders. After inclusion of Pakistan and Ethiopia in the relieved countries, total waivers by Paris Club for dealing with the pandemic have reached around $1.1 billion for 12 nations.
Pakistan, Ethiopia, Chad and Republic of Congo are the latest countries to get relief from Paris Club on Tuesday. Pakistan is one of the biggest receivers of this aid with waiver received for payments this year out of $10.79 billion owed to the Club while combined obligation of the rest of countries is $1.31 billion. The G20 clan is expected to provide relief worth $20 billion or more for 77 countries that have applied so far.
The government of Pakistan has been trying to sought economic relief from bilateral lenders including Paris Club, IMF, ADB and World Bank. The Pakistan currently owes debt servicing of $28 billion during next three years to multilateral creditors. Since the start of pandemic, Prime Minister Imran Khan requested wealthy nations and major lenders to come forward and provide relief to poor and struggling economies including Pakistan through debt moratorium.
The finance ministry is already dealing with the economic repercussions of the pandemic as federal government continues to provide relief packages for different segments of society and industries. The Rs. 1.2 trillion COVID-19 packages announced by Imran Khan in March 2020 is further expanded by Rs. 155 billion packages announced in April 2020 for jobless individuals and SMEs
The debt waiver provided by Paris Club is a huge relief for Pakistan that is already included in top 20 countries affected by corona virus with cases crossing 115,000 and death toll crossing 2000.