ISLAMABAD: Pakistan should suspend international debt repayments and restructure debt with creditors after recent floods added to the country’s financial woes. financial bar reported on Friday, citing a UN policy memo.
The memorandum, which the United Nations Development Program will share with the Pakistani government this week, says the country’s creditors should consider debt relief so policymakers can prioritize financing its disaster response over debt repayments, the newspaper said.
The country’s foreign ministry in Islamabad did not comment on the matter Reuters Request for comments on memorandum. Pakistan’s finance minister and information minister could not immediately be reached for comment.
Flood-hit Pakistan should suspend debt payments, UN paper says
Pakistan has previously estimated damages at $30 billion, and both the government and UN Secretary-General Antonio Guterres have blamed the floods on climate change.
The memo proposes further debt restructuring or swaps, in which lenders would waive debt payments in return for agreeing to invest in Pakistan’s climate-change-resilient infrastructure, the FT said.
The floods affected 33 million Pakistanis, caused billions of dollars in damage and killed more than 1,500 people – raising concerns that Pakistan would default on the debt.