Pakistan has secured a $1.7 billion (Rs272 billion) debt relief agreement to help offset the financial headwinds sparked by the coronavirus pandemic, officials have said.
The deal, following months of negotiations with creditors, will provide a moratorium on debt payments for large swathes of the current fiscal year and help ease the cash-strapped country’s massive financial obligations.
“The Government of Pakistan has successfully negotiated and concluded rescheduling agreements with 19 bilateral creditors, including members of the Paris club,” the Ministry of Economic Affairs said.
The ministry described the deal as ‘timely’ that will help save the ‘lives and livelihoods of millions’. Pakistan’s economy was already on life support before officials began shuttering large segments of the economy in the spring as a range of lockdown measures were rolled out to fight the spread of the coronavirus.
Prime Minister Imran Khan has repeatedly called for debt forgiveness from international donors as tax revenues cratered, inflation soared, the currency was devalued, and fiscal deficits widened.
In June, Pakistan was named as one of a handful of countries to secure a moratorium on debt repayments from the Paris Club in an effort to ease the economic impact of the coronavirus crisis.