ISLAMABAD: Pakistan and Korea have agreed to suspend debt payments totalling $19.911 million.
Details
Under the G-20 Debt Service Suspension Initiative, Pakistan inked an agreement with the Republic of Korea.
According to the Economic Affairs Division, the government of Pakistan signed a ‘Debt Service Suspension Agreement’ with the Republic of Korea on May 15, 2023, amounting to the deferment of payment of loans totalling $19.911 million under the G-20 Debt Service Suspension Initiative (DSSI) framework.
This amount was required to be reimbursed between July and December 2021 but will now be repaid in semi-annual instalments over six years (with a one-year grace period).
Fiscal space provided by G-20 DSSI
Because of the assistance offered by Pakistan’s development members, the G-20 DSSI has delivered the financial flexibility required to address the Islamic Republic of Pakistan’s pressing health and economic requirements.
The total debt suspended under the DSSI framework, spanning the repayment duration from May 2020 to December 2021, is $3,686 million.
Pakistan’s other agreements
Pakistan has already finished and signed 104 agreements with 21 bilateral creditors under the G-20 DSSI. These are for the postponement of debt repayments totalling $3,633 million.
The above-mentioned agreement takes the total to $3,653 million. The others to be signed under the G-20 DSSI are still being negotiated.
