Pakistan External Debt Climbs to $135 Billion
Pakistan’s total external debt nearly doubled over a ten-year period, climbing to $135.1 billion in 2025 from $68.67 billion in 2015, according to the World Bank’s International Debt Report 2026. The figures, as The Times of India reported, underline the country’s growing dependence on foreign borrowing to finance its economic needs and meet scheduled external repayments.
According to figures referenced by Dawn, the aggregate foreign debt portfolio concluding 2025 consisted of $107.07 billion in public and publicly guaranteed obligations, $17.58 billion in private non-guaranteed debt, and short-term borrowings of $10.45 billion. Multilateral institutions held the largest share of public debt at $56.83 billion, while bilateral lenders were owed $42.43 billion and private creditors held $7.8 billion.
Bilateral and Multilateral Creditors Shape the Portfolio
China remained Pakistan’s largest individual creditor with outstanding loans totaling $22.4 billion, as detailed by RTV News. The World Bank followed as the second-largest lender with $19.2 billion, and the Asian Development Bank held claims of $16.83 billion.
Borrowing costs varied sharply across creditor types. Official creditors extended financing featuring a 3.6% interest rate, a 16-year average maturity, and a four-year grace period. Private credit demanded a much steeper average interest rate of 8.6%, accompanied by a three-year repayment period and a grace period of just one year.
Regional Debt Ratios Rise Across MENAP
Across the Middle East, North Africa, Afghanistan, and Pakistan region, external debt-to-gross national income ratios rose from 26.7% to 29.4% in 2025. This marked the sharpest annual increase recorded by any region, reflecting a continued accumulation of external obligations despite minor improvements in debt-service-to-revenue ratios.
Pakistan secured financial relief through targeted measures during the year. China extended the maturity terms on $2 billion of existing loans, while the International Monetary Fund disbursed $2.3 billion under its Extended Fund Facility and Resilience and Sustainability Facility programs.
Financing Requirements Face Senate Scrutiny
Domestically, parliamentary committees reviewed the government’s broader fiscal trajectory. Senate committee members examined public debt projections heading toward Rs 86.7 trillion, alongside planned additional borrowing of Rs 6.86 trillion and total gross financing requirements of Rs 28.65 trillion, according to Minute Mirror.
Officials informed the Senate Standing Committee on Finance that public debt had declined from 75.1% of Gross Domestic Product in the 2023 financial year to 68.6% in the 2026 financial year. Authorities stated an intention to maintain foreign exchange reserves at $21.5 billion while meeting approximately $5 billion in external debt payments over the subsequent six months.
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