Pakistan’s Foreign Debt Nearly Doubles to $135.1 Billion in a Decade, World Bank Report Reveals
Pakistan’s external debt has almost doubled over the past decade, reaching approximately $135.1 billion in 2025, compared with $68.7 billion in 2015, according to the World Bank’s International Debt Report 2026.
The figures highlight the growing importance of foreign financing in Pakistan’s economy and the challenges associated with managing external repayments, interest costs and foreign-exchange reserves.
The report also identifies China as Pakistan’s largest individual creditor, with approximately $22.4 billion outstanding. The World Bank and Asian Development Bank (ADB) are the next-largest individual creditors, with $19.2 billion and $16.83 billion, respectively.
The figures cover the decade ending in 2025 and include several categories of external borrowing, rather than only loans taken directly by the federal government.
Pakistan’s External Debt Rises From $68.7 Billion to $135.1 Billion
Pakistan’s total external debt increased substantially between 2015 and 2025.
According to the World Bank figures, the country’s external debt stock rose from $68.673 billion in 2015 to $135.107 billion in 2025.
This represents an increase of approximately $66.4 billion over ten years, bringing the total close to twice its 2015 level.
The increase reflects Pakistan’s continued reliance on international financing to support government expenditure, development projects, balance-of-payments requirements and foreign-exchange reserves.
The World Bank’s data also shows that Pakistan’s external debt did not increase at the same pace every year. The debt stock rose significantly between 2016 and 2021, declined in 2022, and subsequently increased again.
Pakistan’s External Debt Over the Decade
| Year | External Debt |
|---|---|
| 2015 | $68.67 billion |
| 2016 | $75.13 billion |
| 2017 | $94.08 billion |
| 2018 | $101.12 billion |
| 2019 | $111.10 billion |
| 2020 | $118.95 billion |
| 2021 | $131.75 billion |
| 2022 | $127.59 billion |
| 2023 | $131.02 billion |
| 2024 | $129.92 billion |
| 2025 | $135.11 billion |
Source: World Bank International Debt Statistics 2026. Figures rounded to two decimal places.
The increase between 2015 and 2025 is approximately 96.7%, meaning Pakistan’s external debt stock nearly doubled during the period.
How Is Pakistan’s $135.1 Billion External Debt Distributed?
Pakistan’s external debt includes obligations to different types of creditors.
These include multilateral institutions, foreign governments, commercial lenders, bondholders and other private-sector creditors.
The distinction is important because different creditors offer different financing conditions, repayment schedules and interest rates.
According to the reported breakdown, Pakistan’s external debt in 2025 included:
| Debt Category | Amount |
|---|---|
| Public and publicly guaranteed debt | $107.076 billion |
| Private non-guaranteed debt | $17.58 billion |
| Short-term debt | $10.45 billion |
| Total External Debt | $135.107 billion |
Public and publicly guaranteed debt represents the largest component of the reported total.
Private non-guaranteed debt generally covers external obligations of private-sector borrowers that are not guaranteed by the government. Short-term external debt represents obligations with shorter repayment periods.
These categories should not be confused with the federal government’s direct external borrowing alone. The overall external debt figure covers a wider range of borrowers and obligations.
China Remains Pakistan’s Largest Individual Creditor
China is Pakistan’s largest individual external creditor, according to the World Bank figures cited in the November 2026 report.
Pakistan owed approximately $22.4 billion to China in 2025.
The World Bank and Asian Development Bank were the next-largest individual creditors.
| Creditor | Outstanding Amount |
|---|---|
| China | $22.4 billion |
| World Bank | $19.2 billion |
| Asian Development Bank | $16.83 billion |
China’s position reflects its role in financing infrastructure, energy and other development projects in Pakistan, as well as its broader financial relationship with the country.
The World Bank and ADB provide financing for development programmes, infrastructure improvements, institutional reforms and other projects.
However, creditor rankings do not necessarily indicate that all loans have identical terms. Financing from development institutions can have substantially different repayment conditions from commercial borrowing.
Multilateral Institutions Account for a Major Share of Public External Debt
The World Bank report also provides information about the composition of Pakistan’s public and publicly guaranteed external debt.
Of the $107.076 billion reported for this category:
- $56.83 billion was owed to multilateral creditors.
- $42.43 billion was owed to bilateral creditors.
- $7.8 billion was owed to private creditors.
Multilateral creditors are international financial institutions that provide financing to member countries.
These include institutions such as the World Bank, Asian Development Bank and other development lenders.
Bilateral creditors are individual countries that provide loans or other financial assistance directly to Pakistan.
Private creditors include commercial lenders and bondholders.
The composition matters because repayment conditions can differ considerably between these groups.
For example, development financing may provide longer repayment periods and lower interest rates, while private commercial borrowing can involve higher costs and shorter maturities.
Pakistan’s Official Foreign Loans Carry an Average Interest Rate of 3.6%
One of the important findings in the report concerns the cost of borrowing.
According to the reported figures, Pakistan’s loans from official creditors had an average maturity of approximately 16 years, a four-year grace period and an average interest rate of 3.6%.
Official creditors generally include bilateral governments and multilateral development institutions.
A grace period is the period during which a borrower is generally not required to repay the principal amount, although interest may still be payable depending on the loan agreement.
The longer maturity gives borrowers more time to repay their obligations.
In comparison, private credit carried considerably higher financing costs.
The report placed the average interest rate on private credit at 8.6%, with an average repayment period of approximately three years and a one-year grace period.
Comparison of Pakistan’s External Borrowing Conditions
| Indicator | Official Creditors | Private Creditors |
|---|---|---|
| Average interest rate | 3.6% | 8.6% |
| Average maturity | 16 years | 3 years |
| Grace period | 4 years | 1 year |
Figures reflect the loan conditions reported for the relevant creditor categories in the World Bank report.
The comparison highlights why the composition of external debt is important.
Two countries with similar external debt totals can face very different repayment pressures depending on their interest rates, maturity periods and grace arrangements.
Pakistan’s reliance on longer-term official financing provides different repayment conditions from borrowing through commercial markets.
IMF Provided $2.3 Billion in Financing During 2025
The World Bank report also highlighted Pakistan’s financing arrangements with the International Monetary Fund.
In 2025, the IMF provided approximately $2.3 billion in new disbursements under the Extended Fund Facility (EFF) and Resilience and Sustainability Facility (RSF) arrangements.
These programmes were intended to support Pakistan’s economic stability and address longer-term financial challenges.
The EFF is designed to support countries facing longer-term balance-of-payments problems and requiring economic reforms.
The RSF provides longer-term financing to support measures addressing structural challenges, including those associated with climate resilience.
The report also noted that China extended the maturities of $2 billion in loans to Pakistan during 2025.
Extending loan maturities can reduce immediate repayment pressure by giving a borrower more time to repay outstanding obligations.
However, a maturity extension does not necessarily mean that the principal has been cancelled or that the underlying debt has disappeared.
Global External Debt Also Reaches a Record $9.4 Trillion
Pakistan’s rising external debt is part of a wider increase in borrowing across developing economies.
According to the World Bank’s International Debt Report 2026, external debt among low- and middle-income countries increased by 5.5% in 2025, reaching a record $9.4 trillion.
The increase was associated with several factors, including renewed bond issuance, a weaker US dollar and greater willingness among international investors to lend to developing economies.
Debt owed to private creditors also increased.
The report placed private creditor debt for low- and middle-income countries at approximately $5 trillion in 2025, representing a 5.2% increase.
Debt-service payments continued rising as well.
Total debt-service payments, including principal and interest, increased by 1.9% to approximately $1.4 trillion in 2025.
These figures demonstrate that rising external debt and the cost of servicing it are challenges affecting many developing economies, not only Pakistan.
Developing Countries Face Increasing Debt Repayment Pressures
The World Bank report highlights the growing pressure that debt repayments place on developing countries.
Between 2022 and 2025, low- and middle-income countries paid approximately $436.1 billion more in debt servicing than they received in new financing.
This means that, collectively, these economies transferred more money to creditors through principal and interest payments than they received in new long-term financing during that period.
However, the trend reversed in 2025.
Net long-term debt transfers shifted from an outflow of $118.4 billion in 2024 to an inflow of $45.4 billion in 2025.
The change indicates that developing economies collectively received more long-term financing than they paid out in debt servicing during that year.
Nevertheless, the World Bank warned that borrowing costs remain high, particularly for poorer countries that rely on private financing.
For countries with limited foreign-exchange earnings and relatively small reserves, higher interest rates and shorter repayment periods can create additional financial pressure.
Why Pakistan’s External Debt Matters for the Economy
External borrowing can help countries finance development projects, support imports and manage balance-of-payments pressures.
However, foreign debt also creates obligations that must eventually be repaid in foreign currency.
This makes external debt particularly important for Pakistan, where foreign-exchange availability is a major consideration in economic management.
Several areas of the economy are affected by the country’s external debt position.
1. Pressure on Foreign-Exchange Reserves
Pakistan needs foreign currency to repay external loans, pay interest and finance imports.
Large repayments can place pressure on foreign-exchange reserves, particularly when export earnings and other foreign inflows are insufficient.
Loan rollovers and new financing can help manage immediate repayment requirements, but they do not automatically eliminate existing obligations.
2. Impact on the Exchange Rate
External debt repayments can increase demand for foreign currency.
If foreign-exchange inflows are insufficient, additional demand may place pressure on the rupee.
Exchange-rate movements can also influence the domestic-currency value of foreign debt.
For example, when the rupee depreciates against the US dollar, the rupee value of dollar-denominated obligations increases, even if the dollar amount of the debt remains unchanged.
3. Interest Payments and Government Spending
The government must allocate resources to service its external debt.
Higher interest payments can reduce the fiscal space available for infrastructure, education, healthcare and other public services.
The actual impact depends on the terms of borrowing and the government’s overall budgetary position.
4. Dependence on International Financing
Countries with large external financing requirements may need continued access to international lenders, development institutions and bilateral partners.
This can make economic management more sensitive to global interest rates, international investor confidence and the conditions attached to financing arrangements.
For Pakistan, maintaining sustainable external borrowing conditions is therefore an important part of long-term economic stability.
Pakistan’s $135.1 Billion Debt Figure Is Not the Same as Government External Debt
An important distinction is necessary when interpreting Pakistan’s external debt figures.
The $135.1 billion figure represents total external debt across different categories of borrowers and obligations. It should not be described as money borrowed exclusively by the federal government.
In February 2026, Pakistan’s Finance Ministry issued a clarification stating that total external debt and liabilities stood at approximately $138 billion at that time, while external public debt was around $92 billion.
The ministry explained that the broader external debt and liabilities figure included public and publicly guaranteed debt, public-sector enterprise obligations, bank borrowings, private-sector external debt and intercompany liabilities to direct investors.
It also stated that nearly 75% of external public debt consisted of concessional and long-term financing from multilateral institutions, excluding the IMF, and bilateral development partners.
The ministry placed the average cost of external public debt at approximately 4%.
These figures relate to a different reporting period and debt definition from the World Bank’s 2025 external debt stock. They should therefore not be directly compared as if they represented identical categories and dates.
What Should Pakistan Do to Manage Its External Debt?
The increase in external debt makes debt management and foreign-exchange generation important economic priorities.
Several areas are particularly relevant to improving the country’s external financial position.
Increase exports: Higher exports can generate foreign currency and reduce dependence on external borrowing to finance imports.
Attract sustainable investment: Foreign direct investment can support economic activity and provide longer-term capital without creating the same repayment structure as conventional loans.
Improve debt maturity management: Longer repayment periods can reduce the concentration of large repayments in individual years.
Control expensive borrowing: Commercial loans and international bonds can be useful financing instruments, but their costs and repayment schedules require careful assessment.
Strengthen foreign-exchange reserves: Adequate reserves can help countries meet external obligations and manage temporary financing pressures.
Improve the return on borrowed funds: Foreign borrowing is more sustainable when it finances productive investments that strengthen economic growth and generate future foreign-exchange earnings.
The central challenge is not simply reducing the total amount of external borrowing. It is ensuring that new financing supports economic activity and that repayment obligations remain manageable.
Key Figures From the World Bank’s International Debt Report 2026
| Indicator | Reported Figure |
|---|---|
| Pakistan’s external debt in 2015 | $68.67 billion |
| Pakistan’s external debt in 2025 | $135.11 billion |
| Increase over the decade | Approximately 96.7% |
| China exposure | $22.4 billion |
| World Bank exposure | $19.2 billion |
| ADB exposure | $16.83 billion |
| Official creditors’ average interest rate | 3.6% |
| Private creditors’ average interest rate | 8.6% |
| IMF disbursements in 2025 | $2.3 billion |
| Global low- and middle-income countries’ external debt in 2025 | $9.4 trillion |
Frequently Asked Questions
1. How much is Pakistan’s external debt in 2025?
According to the World Bank’s International Debt Report 2026, Pakistan’s external debt reached approximately $135.1 billion in 2025.
2. How much was Pakistan’s external debt in 2015?
Pakistan’s external debt stood at approximately $68.67 billion in 2015.
3. Who is Pakistan’s largest foreign creditor?
China was Pakistan’s largest individual creditor, with approximately $22.4 billion outstanding in 2025.
4. How much does Pakistan owe the World Bank and ADB?
The reported figures show approximately $19.2 billion owed to the World Bank and $16.83 billion to the Asian Development Bank.
5. What is the average interest rate on Pakistan’s official external loans?
The reported average interest rate on loans from official creditors was approximately 3.6%, compared with 8.6% for private credit.
6. Does Pakistan’s $135.1 billion external debt belong entirely to the government?
No. The total includes public and publicly guaranteed debt, private non-guaranteed debt and short-term external debt. It is broader than the federal government’s direct external debt.
7. How much financing did Pakistan receive from the IMF in 2025?
The World Bank report cited approximately $2.3 billion in IMF disbursements under the Extended Fund Facility and Resilience and Sustainability Facility arrangements during 2025.
8. Does a loan rollover reduce Pakistan’s external debt?
Not necessarily. A rollover generally extends or renews an existing obligation, reducing immediate repayment pressure without automatically cancelling the principal amount.
Conclusion
Pakistan’s external debt nearly doubled between 2015 and 2025, reaching approximately $135.1 billion, according to the World Bank’s International Debt Report 2026.
China remains the country’s largest individual creditor, followed by the World Bank and Asian Development Bank. The report also highlights the difference between the financing conditions offered by official creditors and private lenders.
Although longer-term official financing can provide more manageable repayment conditions, the overall increase in external debt underscores Pakistan’s continued need to strengthen exports, attract investment and manage foreign-exchange requirements.
The most important issue is not simply how much Pakistan owes, but whether the country’s economy can generate sufficient foreign currency and sustainable growth to meet its obligations without placing excessive pressure on reserves, the exchange rate and public finances.