Tuesday May 12, 2020
ISLAMABAD: Adviser to the Prime Minister on Finance and Revenue Hafeez Shaikh on Monday said that the payments due in debt servicing to the Group of Twenty (G20) countries till December 2020 were under process of rescheduling due to the coronavirus pandemic, The News reported.
However, the adviser to the premier cautioned that the government had opted not to go for any commercial loan rescheduling, as of now. Pakistan could get $1.8bn of foreign loans rescheduled under the scheme in order to improve the economy suffering from the impact of the virus.
According to the report in the The News, the finance adviser appreciated the support offered by the friendly countries in this regard. "We hope that the cooperation would continue in future for the benefit of the people," he said in a statement issued on Monday.
Shaikh made the statement while meeting the Ambassador of Germany to Pakistan, Bernhard Stephan Schlagheck, who was accompanied by French Ambassador to Pakistan, Marc Barety, and Economic Counselor Anais Boitiere, in the federal capital on Monday afternoon.
Despite the good news, The News reported that Chinese loans worth $19 billion outweigh all other bilateral loans in the foreign loan portfolio of Pakistan. There status in the present scenario remains unclear, as does the status of loans obtained from Saudi Arabia and United Arab Emirates.
G-20 countries had agreed a debt freeze for under-developed countries across the world, including Pakistan, to help them fight the economic implications of the virus. Pakistan applied for debt relief and was expected to get $1.8 billion of loans rolled over by 11 bilateral creditors.
“Pakistan’s firm stance in favour of debt rescheduling drive at the G-20 forum was based on the belief that the poorer countries genuinely require this assistance though Pakistan specifically had benefited lesser from the said relief,” a statement quoted the finance adviser as saying.
“Before the pandemic, Pakistan was successfully able to control its current account deficit and was expecting a growth of 3% during the ongoing financial year after observing strict financial discipline. However, after the outbreak the growth projections have become difficult,” he said.
Shaikh said it is expected that the growth might remain between -1 to -1.5% due to the ongoing circumstances. He added that the finance division would plan for the mitigating circumstances.
"The finance division will adhere to the requirements of debt limitation law before planning to take up additional burden as most of the loans will be for the purpose of clearing old debt stocks," he noted.
The ambassadors discussed with the adviser the details of the debt rescheduling offered by G-20 countries and the need for any further loans. The meeting was apprised about the details of the relief package offered to the vulnerable by the government as well.
Originally published in The News