Pakistan External Debt Nearly Doubles to $135bn
Pakistan external debt almost doubled over the decade ending in 2025, rising from $68.7 billion to $135.1 billion, according to the World Bank’s International Debt Report 2026.
The report puts Pakistan’s total external debt at $135.107 billion in 2025, against $68.673 billion in 2015. The figures cover money owed to foreign lenders by the government, state-backed bodies and private borrowers.
Pakistan external debt: who the money is owed to
Public and publicly guaranteed debt made up most of the stock, at $107.076 billion. Private non-guaranteed debt stood at $17.58 billion, and short-term debt at $10.45 billion.
Within the public and publicly guaranteed portion, $56.83 billion was owed to multilateral creditors, $42.43 billion to bilateral creditors and $7.8 billion to private creditors.
China remained Pakistan’s largest single creditor, with $22.4 billion outstanding. The World Bank followed with $19.2 billion, and the Asian Development Bank with $16.83 billion.
The cost of borrowing
Loans from official creditors carried an average maturity of 16 years, with a four-year grace period and an average interest rate of 3.6 per cent. Private credit cost far more. It carried an average interest rate of 8.6 per cent, with a three-year repayment period and a one-year grace period.
The gap between official and private borrowing costs has widened across the developing world. For countries eligible for International Development Association financing, new commitments from private creditors carried an average interest rate of 8.2 per cent in 2025, the highest since the late 1980s. The difference between official and private rates for that group widened from 3.4 percentage points in 2016 to 5.5 percentage points in 2025.
The report also recorded some relief for Pakistan in 2025. China extended the maturities on $2 billion in loans to Pakistan during the year. The International Monetary Fund provided $2.3 billion in new disbursements under the Extended Fund Facility and the Resilience and Sustainability Facility to support the country’s long-term economic stability.
Why the bill kept growing
The Middle East, North Africa, Afghanistan and Pakistan region recorded improvements in debt-service and interest ratios. Even so, its external debt-to-gross national income ratio rose from 26.7 per cent to 29.4 per cent in 2025, the largest single-year increase of any region, which points to continued debt accumulation.
The pattern matches the wider picture for low- and middle-income countries. Their external debt climbed 5.5 per cent to a record $9.4 trillion in 2025, the sharpest increase in four years, as bond issues rebounded, the US dollar weakened and private lenders returned to developing country markets.
Debt service payments rose for a fifth year in a row, up 1.9 per cent to $1.4 trillion in 2025. Payments to bondholders rose 13.7 per cent to $363.1 billion. Between 2022 and 2025, low- and middle-income countries paid about $436.1 billion more in debt service than they received in new financing, though the trend reversed in 2025 as long-term debt flows swung from a net outflow of $118.4 billion in 2024 to a net inflow of $45.4 billion.
The weaker dollar also pushed the numbers up. The depreciation of the US dollar during the year accounted for 28.2 per cent of the increase in the external public and publicly guaranteed debt of low- and middle-income countries.
What the rise means for Pakistan
The World Bank figures sit alongside Pakistan’s own debt record. Total public debt reached Rs91 trillion by June 2026, up Rs6.21 trillion, or 7.3 per cent, in a year. External public debt within that total stood at Rs29.35 trillion.
Rollover support from friendly countries has kept the position workable. China and Kuwait agreed to roll over $4.3 billion in loans, while reserves have steadied. State Bank reserves rose to $21.56 billion in the week ended October 30, the third weekly gain in a row.
The pressure now sits in the budget. The government is under IMF pressure to broaden the tax base and raise growth, and it is weighing a tax reprieve for 1.2 million small traders in the fixed tax scheme. The World Bank report shows why the room for relief is narrow. When private credit costs 8.6 per cent and official credit costs 3.6 per cent, every dollar borrowed on commercial terms adds more to the next year’s bill.
The World Bank published the full findings in its International Debt Report 2026. Dawn reported the Pakistan figures on Friday.
Frequently asked questions
How much is Pakistan’s external debt?
Pakistan’s total external debt stood at $135.1 billion in 2025, according to the World Bank’s International Debt Report 2026. It was $68.7 billion in 2015, so the stock almost doubled in a decade.
Who is Pakistan’s largest creditor?
China is Pakistan’s largest single creditor, with $22.4 billion outstanding. The World Bank follows with $19.2 billion, and the Asian Development Bank with $16.83 billion.
What makes up Pakistan’s external debt?
Public and publicly guaranteed debt accounts for $107.076 billion, private non-guaranteed debt for $17.58 billion, and short-term debt for $10.45 billion. Of the public portion, $56.83 billion is owed to multilateral creditors and $42.43 billion to bilateral creditors.
How expensive is Pakistan’s private borrowing?
Private credit carried an average interest rate of 8.6 per cent, with a three-year repayment period and a one-year grace period. Loans from official creditors averaged 3.6 per cent interest, with a 16-year maturity and a four-year grace period.
Did Pakistan get any debt relief in 2025?
China extended the maturities on $2 billion in loans to Pakistan in 2025. The IMF provided $2.3 billion in new disbursements under the Extended Fund Facility and the Resilience and Sustainability Facility.
