The government on Wednesday signed two debt service suspension agreements amounting to the suspension of loans worth $197.49 million, under the G-20 Debt Service Suspension Initiative (DSSI) framework.
As per a statement released by the Ministry of Economic Affairs Division, an amount of $191.6 million was owed to Japan International Cooperation Agency (JICA) during the period January to June 2021, while $5.89 million was owed to the Government of the Swiss Confederation during the period July to December 2021.
“These amounts will now be repaid over a period of six years (including a one-year grace period) in semi-annual instalments,” read the statement.
Established in May 2020, the DSSI is a G-20 initiative which helped countries concentrate their resources on fighting the Covid-19 pandemic. Forty-eight out of 73 eligible countries participated in the initiative before it expired at the end of December 2021.
Pakistan government said the DSSI initiative has provided much-needed fiscal space to the country, to deal with its urgent health and economic needs.
Under the initiative, borrowers commited to use freed-up resources to increase social, health, or economic spending in response to the crisis. They pledged to disclose all public sector financial commitments involving debt and debt-like instruments. They also commit to limit their non-concessional borrowing under the IMF arrangements and the World Bank’s Sustainable Development Finance Policy.
“The total amount of debt suspended and rescheduled under the DSSI framework, covering the period from May 2020 to December 2021, stands at $3,688 million,” said the Ministry of Economic Affairs Division.
Pakistan has already concluded and signed 91 agreements with 21 bilateral creditors for the rescheduling of its debts under the G-20 DSSI framework, amounting to the rescheduling of almost $2,953 million.
“The signing of the above-mentioned agreements brings this total to $3,150 million,” the ministry said. Meanwhile, negotiations for remaining agreements to be signed under the G-20 DSSI are ongoing.
Forex, PSEs and banks liabilities not included: $88.8bn external debt recorded at end of March