Government of Pakistan signs Memorandum of Understanding with Paris Club countries for 2nd round of Debt Suspension Initiative

PRESS RELEASE

 

Government of Pakistan signs Memorandum of Understanding with Paris Club countries for 2nd round of Debt Suspension Initiative

A Memorandum of Understanding has been successfully concluded between the Government of Pakistan and 17 Paris Club countries under the Debt Suspension Initiative (DSSI) announced by the G-20 countries in October, 2020. This completes the first step for 2nd round of Debt Suspension from 21 bilateral countries (Paris Club and G-20).  The cumulative relief for the debt suspension period i.e. 1st January to 30th June, 2021, is estimated to be between 800 to 900 million US dollars.

Under the 2nd phase of DSSI, payment of bilateral debt and its servicing for the relevant period will remain suspended and will be repaid in 6 years including a grace period of one year.  This will provide much needed relief on account of debt service obligations to Pakistan.  The fiscal space made available will be utilized to mitigate socio-economic impact of COVID-19.

It may be recalled that Pakistan has already concluded bilateral agreements with 21 countries under the 1st phase of the DSSI, involving debt suspension of 1.7 billion US dollars for the period from May to December, 2020.