Pakistan’s external debt reaches $135.1bn after decade-long rise

Pakistan’s external debt rose to $135.1 billion by the end of 2025, almost twice the $68.7 billion recorded a decade earlier, according to figures in the World Bank’s International Debt Report 2026. The data provides a broad view of Pakistan’s outstanding external obligations, rather than a measure of a single year’s borrowing or repayment activity.

The reported total includes $107.1 billion in public and publicly guaranteed debt, $17.6 billion in private non-guaranteed debt and $10.5 billion in short-term debt. Public and publicly guaranteed debt refers to obligations of the government or debt backed by a government guarantee, while private non-guaranteed debt is borrowed without such backing.

Multilateral creditors accounted for the largest part of the public and publicly guaranteed amount, at $56.8 billion. Bilateral creditors were owed $42.4 billion, while private creditors accounted for $7.8 billion in this category. These figures show that Pakistan’s external financing exposure is spread across international institutions, other governments and private lenders.

China remained Pakistan’s largest individual creditor, with $22.4 billion outstanding. The World Bank was next with $19.2 billion, followed by the Asian Development Bank at $16.8 billion. The creditor breakdown is important because repayment terms, maturities and interest costs can differ substantially between multilateral, bilateral and commercial borrowing.

The report also highlighted a difference in borrowing costs. Official-creditor loans had an average maturity of 16 years, a four-year grace period and an average interest rate of 3.6 per cent. Private credit carried an average rate of 8.6 per cent, with an average three-year repayment period and a one-year grace period, making the structure of debt as relevant as the total amount.

During 2025, China extended maturities on $2 billion in loans to Pakistan, while the International Monetary Fund disbursed $2.3 billion under its Extended Fund Facility and Resilience and Sustainability Facility arrangements. The figures do not by themselves determine Pakistan’s immediate debt-servicing position, but they underline why export growth, foreign-exchange inflows, fiscal management and access to affordable financing remain central economic issues.

The wider report said external debt across low- and middle-income economies reached a record $9.4 trillion in 2025. For Pakistan, the latest numbers provide a benchmark for assessing future borrowing, repayments and the cost of financing, particularly as higher-cost private lending can place greater pressure on budgets and foreign-exchange reserves.