Pakistan’s total external debt almost doubled to USD 135.1 billion over the decade ending in 2025, according to the World Bank’s International Debt Report 2026.
Citing the World Bank report, the Dawn newspaper reported that the country’s external debt increased from USD 68.673 billion in 2015 to USD 135.107 billion in 2025.
This included public and publicly guaranteed debt of USD 107.076 billion, private non-guaranteed debt of USD 17.58 billion and short-term debt of USD 10.45 billion.
Of the public and publicly guaranteed debt, USD 56.83 billion was owed to multilateral creditors, USD 42.43 billion to bilateral creditors and USD 7.8 billion to private creditors.
China was Pakistan’s largest individual creditor, with USD 22.4 billion outstanding, followed by the World Bank with USD 19.2 billion and the Asian Development Bank (ADB) with USD 16.83 billion.
The report put the average maturity of loans from official creditors at 16 years, with a four-year grace period and an average interest rate of 3.6 per cent.
On the other hand, private credit carried an average interest rate of 8.6 per cent, with a three-year repayment period and a one-year grace period.
The Middle East, North Africa, Afghanistan and Pakistan (Menap) region recorded improvements in debt-service and interest ratios.
However, its external debt-to-gross national income (GNI) ratio rose from 26.7 per cent to 29.4 per cent in 2025, the largest single-year increase of any region, indicating continued debt accumulation.
In 2025, China extended the maturities on USD 2 billion in loans to Pakistan, while the International Monetary Fund (IMF) provided USD 2.3 billion in new disbursements under the Extended Fund Facility and Resilience and Sustainability Facility arrangements to support the country’s long-term economic stability.
Overall, the borrowing by low- and middle-income countries (LMICs) surged in 2025, marking the sharpest increase in external debt in four years and a forceful return of private creditors to developing country markets.
External debt climbed 5.5 per cent to a record USD 9.4 trillion as bond issues rebounded, the US dollar weakened and investors again showed greater willingness to lend.
But the reopening of capital markets came at a steep price, especially for the poorest countries, which faced some of their highest borrowing costs in decades.
Debt service payments also rose for a fifth consecutive year. Even so, stronger economic growth helped stabilise some debt ratios and net long-term debt transfers turned positive after years of outflows.
The increase in external debt was even faster for countries eligible for International Development Association (IDA) financing, rising 8.1 per cent to USD 1.3 trillion, and for low-income countries, climbing 8.9 per cent to USD 262.4 billion, the biggest increase since 2020.
