ISLAMABAD: The Economic Affairs Division, the Government of Pakistan and the Saudi Fund for Development (SFD) have signed two debt service suspension agreements amounting to $846 million under the G-20 Debt Service Suspension (DSSI).
Nawaf bin Saeed Al-Malkiy, Ambassador of the Kingdom of Saudi Arabia to Pakistan, attended the signing ceremony held here.
Dr. Saud Ayid RAlshammari, Managing Director for Asia represented SFD at the signing ceremony.
This amount which was to be paid during the trial period from May 2020 to December 2021 will now be paid over a period of six years, starting in 2022, in semi-annual installments.
With support from the SFD – one of Pakistan’s major bilateral development partners – as well as other bilateral creditor countries, the G-20 DSSI has provided fiscal space to address health and socio-economic needs. -economic issues of Pakistan. .
The total amount of debt that has been suspended and rescheduled under the DSSI, covering the period from May 2020 to December 2021, is $3,688 million.
Pakistan has already concluded and signed 80 agreements with 21 bilateral creditors for the rescheduling of its debts under the G-20 DSSI, representing a rescheduling of $2,088 million.
The signing of agreements with the SFD brings the total rescheduled amount to $2,934 million, while negotiations for the remaining $754 million are ongoing. Agreements for this amount are expected to be signed with the respective bilateral development partners during the current fiscal year.
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The International Monetary Fund (IMF), in its latest report entitled Article IV Consultation, Sixth Review under the Extended Arrangement under the Extended Financing Facility, and Requests for Waivers of Applicability and failure to meet the performance criteria and rescheduling of access, projected Pakistan’s gross external financing needs at $30.417 billion for 2021-22 or 9.5% of GDP and $41.882 billion for 2023-24 or 11.2% of GDP.
The report notes that financing commitments from bilateral and multilateral partners, and the temporary suspension of debt service to official bilateral creditors granted under the G20 DSSI initiative, will cover gross public external financing needs. during fiscal year 2022 and until the end of the program in October 2022.
He further stated that the DSSI covers approximately $3.8 billion expiring from May 2020 to December 2021, of which approximately: (i) US$1.1 billion relates to the second cycle of DSSI covering the service of debt from January to June 2021; and (ii) $1.0 billion for the third DSSI cycle covering July-December 2021.
Official FY2022 funding includes support from China ($6.6 billion, including $4 billion rollover of SAFE deposits), United Arab Emirates ($2 billion rollover), the World Bank ($2.4 billion), the Asian Development Bank ($1.2 billion). ), the Islamic Development Bank ($1 billion) and other bilateral aid under the G20 initiative ($1 billion).
The government continues to benefit from the temporary suspension of debt service to official bilateral creditors under the G-20 DSSI initiative, which will cover $1.0 billion maturing between July and December 2021 ( third cycle of DSSI).
Copyright Business Recorder, 2022