The IMF and the World Bank announced that they would endorse this action in response to a joint commitment by the 20 countries to postpone debt servicing for the poorest countries suffering from COVID-19 pandemics.
All these developments that pave the way for Pakistan’s debt repayment in the coming two years as Islamabad is urgently pursuing such a facility to build much-needed fiscal space for the country’s neglected health sector.
The initiative will “provide north of $20 billion of immediate liquidity” for poor countries to use “for their health system and support their people facing COVID-19.
In a joint statement by World Bank Group President David Malpass and IMF Managing Director Kristalina Georgieva on outcome of G20 Finance Ministers’ meeting stated,
“We strongly welcome the decision of the G20 to respond to our call to allow the poorest countries of the world that request forbearance to suspend repayment of official bilateral credit on May 1. This is a powerful, fast-acting initiative that will do much to safeguard the lives and livelihoods of millions of the most vulnerable people. The World Bank Group and IMF will move quickly to respond to the G20’s request for us to support this action by working closely with these countries in ways that make the best use of this vital lifeline. We championed this debt initiative, and we’re committed to taking all possible steps to support the poor.”