G20 nations have agreed to freeze bilateral government loan repayments for 76 poor countries of the world. Mohammed al-Jadaan, finance minister of Saudi Arabia which is the current leader of G20 has also urged the private sector creditors to provide assistance on voluntary basis saying “We encourage them to consider it in support of these countries and the people of these countries.”
This debt relief covers the payments that are due to be paid to G20 governments up to the end of 2020. This broadly means that for now “poor countries don’t need to worry about repaying over the course of the next 12 months.” The payments will instead have to be made between 2022 and 2024.
An IMF report shows Pakistan has $12.731 billion of external debt repayment obligations in FY2021 that could be subject to treatment under the debt relief plan. This could provide a huge economic relief to the country amid COVID-19 economic crisis
The IMF has called the economic crisis the “Great Lockdown,” warning it will slash $9 trillion off of global growth as the world economy contracts by three percent this year, the most severe downturn since the Great Depression in the 1930s.