Countries in the G20 group have decided to suspend debt payments for the world’s poorest economies as they are already having a hard time dealing with the novel coronavirus.

Pakistan is one of the countries who have been seeking debt relief.

As per the official G20 Finance Ministers and Central Bank Governors Meeting communique, all IDA-countries currently in any debt service to the IMF and the World Bank and all the least developed countries as specified by the United Nations, currently in any debt service to the IMF and the World Bank, would be eligible for debt relief.

The IDA group includes of 76 countries and Pakistan is one of them.

The standardized term sheet states that the suspension period will begin on May 1st, 2020, and will continue until the end of 2020. It also reported that the creditors would consider a potential extension throughout 2020, taking into consideration a World Bank and IMF report on the funding needs of entitled countries.

The agreement says that the money is due to paid by the end of 2020.

Speaking at a conference, Shah Mahmood Quershi informed that International Monetary Fund (IMF) has agreed to provide a one-year relief as the world faces a coronavirus pandemic. He acknowledged the relief could be prolonged as situation is not clear yet.

Mr. Queshi told the media that Pakistan spends almost $10 to $12 billion on debt servicing annually. While the finance ministry was working out the specifics, the effect of debt relief would be ‘substantial’ for Pakistan.

He said, “Prime Minister Imran Khan had appealed to IMF for debt relief for developing countries which was accepted by the Fund. IMF has announced it would give one-year relief to 76 developing nations including Pakistan.”

The G20 agreement stated, “We commit to use all available policy tools to support the global economy, boost confidence, maintain financial stability and prevent deep and prolonged economic effects. As mandated by the extraordinary G20 Leaders’ Summit, we endorse the G20 Action Plan in response to the COVID-19 pandemic, which sets out the key principles guiding our response, and our commitments to specific actions to drive forward international economic cooperation as we navigate this crisis and look ahead to a robust, sustained and inclusive global economic recovery.”