The extension of the debt suspension is approved for another six months amid the coronavirus pandemic until June 2021 by the G20 nations.
World’s richest nations have agreed to renew the debt-relief initiative for the poorest nations through at least the first half of 2021. Pakistan is one of the nations that availed it.
According to reports, the Saudi Arabia Finance Minister Mohammed al Jadaan said after meeting with the G20 finance ministers and central bank governors:
“We have agreed to extend the Debt Service Suspension Initiative (DSSI) by six months.”
According to the Saudi Finance Minister statement, the debt is suspended until June 2021, but it could be further extended until the end of 2021 after evaluation of the circumstances in the next meeting of the International Monetary Fund (IMF) and World Bank (WB).
“In light of the continued liquidity pressure, while progressively addressing debt vulnerabilities, we agreed to extend the DSSI by six months,” the statement said.
Extension in Debt Suspension: A Moment of Relief in COVID-19 for Pakistan
Pakistan is among other countries that availed the relief. It is pertinent to mention here that it was Pakistan’s Prime Minister who requested to suspend the debt repayment temporarily for countries who are financially suffering.
The G20 pledged in April to suspend debt service from the world’s most susceptible countries for whole year because of a sudden fall in the economy due to coronavirus pandemic. Around $14 billion in debt payment was due to expire at the end of the year.
Although, due to ease in restriction imposed by countries, the economy has begun gradually as businesses are reopening but still recovery is sharply irregular. As described by the G20 that many of the poorest countries are spending more on debt payments rather on live-saving services.
The economic pressure on developed and under developing countries instigated several international agencies including high-profile Amnesty International and Transparency International to press the G20 nations in order to suspend the debt service at least through 2021.