The Paris Club of creditor countries has given another extension to Pakistan to service its debt of $11.5 billion so that the country can allocate the resources to combat the COVID-19 pandemic.
The Paris Club in its statement on Friday said that the country had until December to make the payment due to them.
The statement added, “[Islamabad] is committed to devoting the resources freed by this initiative to increase spending in order to mitigate the health, economic and social impact of the COVID-19 crisis.”
“The Government of the Islamic Republic of Pakistan is also committed to seeking from all its other bilateral official creditors a debt service treatment that is in line with the agreed term sheet and its addendum. This initiative will also contribute to help the Islamic Republic of Pakistan to improve debt transparency and debt management,” added Paris Club.
The statement added that the club of creditors would keep the pace up to coordinate with non-Paris Club G20 creditors and other stakeholders in the ongoing implementation of the Debt service suspension Initiative (DSSI) and its extension, so as to provide maximum support to beneficiary countries.
According to the data of the International Monetary Fund, Pakistan’s debt amounts to almost 90% of its gross domestic product.
The IMF data also noted that the country’s debt service for the 2021-2022 fiscal year amounted to $56.9 billion.
Pakistan owes $11.5 billion to the Paris Club, according to the IMF.
Formed in 1956, the Paris Club is an informal group of official creditors who finds coordinated and sustainable solutions to the payment issues faced by borrower countries.