Pakistan should suspend international debt repayments and restructure loans with creditors after recent floods added to the country’s financial crisis, the Financial Times reported on Friday, citing a UN policy memo.

The memorandum, which the UN Development Programme will share with the government this week, states that the country’s creditors should consider debt relief so that policymakers can prioritise financing its disaster response over loan repayment, the newspaper said.

Pakistan has earlier estimated the damage at $30 billion, and both the government and UN Secretary General Antonio Guterres have blamed the flooding on climate change.

The memo further proposed debt restructuring or swaps, where creditors would let go of repayments in exchange for Pakistan agreeing to invest in climate change-resilient infrastructure, FT said.

Floods have affected 33 million Pakistanis, inflicted billions of dollars in damage, and killed over 1,500 people — creating concern that Pakistan will not meet debts.

Earlier this week, the UN secretary general, who also visited Pakistan recently, made a forceful address to world leaders gathered for the opening day of the General Assembly’s high-level debate.

Guterres repeated the appeal he first made during his visit where he urged lenders to consider debt reduction to help those nations that were facing a possible economic collapse.

“Creditors should consider debt reduction mechanisms such as debt-climate adaptation swaps,” he said again at the UNGA. “These could have saved lives and livelihoods in Pakistan, which is drowning not only in floodwater, but in debt.”

Follow Dawn Business on X, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

Pathways to peace
Updated 27 Apr, 2026

Pathways to peace

NEGOTIATIONS to hammer out the 2015 Iran nuclear agreement took nearly two years before a breakthrough was achieved....
Food-insecure nation
27 Apr, 2026

Food-insecure nation

A NEW UN-backed report has listed Pakistan among 10 countries where acute food insecurity is most concentrated. This...
Migration toll
27 Apr, 2026

Migration toll

THE world should not be deceived by a global migration count lower than the highest annual statistics on record —...
Immunity gap
Updated 26 Apr, 2026

Immunity gap

Pakistan’s Big Catch-Up campaign showed progress but also exposed the scale of gaps in routine immunisation.
Danger on repeat
26 Apr, 2026

Danger on repeat

DISASTERS have typically been framed as acts of nature. Of late, they look increasingly like tests of preparedness...
Loose lips
26 Apr, 2026

Loose lips

PAKISTANIS have by now gained something of an international reputation for their gallows humour, but it seems that...