The World Bank and International Monetary Fund (IMF) have decided to provide immediate debt relief to the world’s poorest economies amid COVID-19.
As per the recent statement, both IMF and the World Bank directed the official bilateral creditors to suspend debt payments from the International Development Association (IDA) countries, if requested. As the countries associated with IDA formulates a quarter of the world’s population and two-thirds of the world’s population living in extreme poverty, will be hardest hit by the coronavirus pandemic.
The World Bank and IMF said, “This will help with IDA countries’ immediate liquidity needs to tackle challenges posed by the coronavirus outbreak and allow time for an assessment of the crisis impact and financing needs for each country.”
According to the official data, at the end of the previous fascial year, Pakistan’s public debt stood at 85% i.e. Rs. 31.8 trillion of GDP. The public debt is expected at 83% of GDP by the end of the current fiscal year.
Pakistan’s gross foreign currency reserves held by the central bank entirely depends on hot foreign money. Foreign investors had invested $3.4 billion in government securities during the previous five months.
According to the State Bank of Pakistan, due to the panic created by the coronavirus, foreign investors are aggressively withdrawing their investment to secure their money, $1.74 billion has been withdrawn till now.
G20 leaders are going to hold an online conference on Thursday to discuss an action plan to deal with the current situation amid COVID-19.