G20 Offered Debt Relief Extension To Poor Countries

G20 Offered Debt Relief Extension To Poor Countries

G20 has extended the debt relief for poor countries for six more months, to help them fight against the coronavirus pandemic.

The Debt Service Suspension Initiative (DSSI) was first approved in May 2020. It was decided to run until December of 2020.

Pakistan was also given debt relief under this initiative, and about $1.8 billion of the country’s unpaid debt service payments due till December were rescheduled through this.

After the new announcement, all the unpaid debt that was owed to bilateral creditors from the period of Dec 2020 to June 2020 will be rescheduled because of the extension.

“In light of the continued liquidity pressure, while progressively addressing debt vulnerabilities, we agreed to extend the DSSI by six months, and to examine by the time of the 2021 IMF/WBG Spring Meetings if the economic and financial situation requires to extend further the DSSI by another 6 months,” stated communique from G20 finance ministers and central bank governors in the meeting, as quoted by The Dawn.

They found that this initiative helped them to make more pandemic related expenses in the countries availing it.

Since the launch, more than seventy countries have joined the initiative. As per the statistics on the DSSI website, Pakistan has saved $2.07 Billion in debt service payment till now due to this initiative.

However, we can’t estimate the savings that extension for 6 more months will allow as there are no statistics on that.

Read More: Pakistan Total Debt Increases by 38% in an Attempt to Cover up Previous Debts.

Pakistan will have to pay the money saved this year in a few years’ time after the initiative will expire.