Pakistan, Korea sign $19.9m debt service suspension accord

ISLAMABAD: Pakistan and Korea have signed a debt service suspension agreement of $19.911 million.

Pakistan signed an agreement with the Republic of Korea under the G-20 Debt Service Suspension Initiative. According to an announcement made by the Economic Affairs Division, the government of Pakistan, on 15th May 2023, signed a ‘Debt Service Suspension Agreement’ with the Republic of Korea amounting to the deferment of payment of loans worth $19.911 million, under the G-20 Debt Service Suspension Initiative (DSSI) framework.

This amount initially had to be repaid between July and December 2021, and will now be repaid over a period of six years (including a one-year grace period) in semi-annual instalments. Due to the support extended by the development partners of Pakistan, the G-20 DSSI has provided the fiscal space which was necessary to deal with the urgent health and economic needs of the Islamic Republic of Pakistan.

The total amount of debt, that is to be suspended under the DSSI framework, covering the period of repayment from May 2020 to December 2021, stands at $3,686 million.

Pakistan has already concluded and signed 104 agreements with 21 bilateral creditors for the deferment of its debt repayments under the G-20 DSSI, amounting to $3,633 million. The signing of the above-mentioned agreement brings this total to $3,653 million. Negotiations for the remaining agreements to be signed under the G-20 DSSI are ongoing.