ISLAMABAD: Pakistan’s external debt stock increased 4 percent to USD 135.1 billion in 2025, with multilateral and bilateral creditors accounting for the bulk of the country’s public and publicly guaranteed external obligations, while the cost of new private borrowing remained significantly higher than official financing, the World Bank has reported.
According to the World Bank’s International Debt Report 2026, Pakistan’s external debt rose from USD 68.7 billion in 2015 to USD 135.1 billion in 2025, nearly doubling over the decade, despite a relatively modest 4 percent increase during the latest year.
The country’s external debt comprised USD 107.076 billion in public and publicly guaranteed debt, USD 17.58 billion in private non-guaranteed debt and USD 10.451 billion in short-term obligations at the end of 2025.
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The report showed that multilateral creditors accounted for USD 56.832 billion of Pakistan’s public and publicly guaranteed external debt, while bilateral creditors held USD 42.439 billion. Another USD 7.805 billion was owed to private creditors.
China remained Pakistan’s largest bilateral creditor, with outstanding claims of USD 22.419 billion, followed by other bilateral creditors with USD 11.850 billion. The World Bank, including IDA financing, accounted for USD 19.214 billion, while the Asian Development Bank held USD 16.830 billion.
The IMF provided USD 2.3 billion in new disbursements to Pakistan in 2025, using the arrangement under the Extended Fund Facility and the arrangement under the Resilience and Sustainability Facility to support the country’s efforts to achieve sustainable long-term growth. In Pakistan, the Chinese government extended the maturities on agreements under which approximately USD 2 billion is due in 2025.
The data also highlighted the relatively expensive nature of Pakistan’s access to private external financing. New commitments from official creditors in 2025 carried an average interest rate of 3.6 percent, with an average maturity of 16 years and a four-year grace period.
In comparison, new private creditor commitments carried an average interest rate of 8.6 percent, with a maturity of just three years and a one-year grace period, reflecting substantially shorter repayment horizons and higher borrowing costs.
The report placed Pakistan’s external debt-to-gross national income (GNI) ratio at 34 percent in 2025, while debt service payments accounted for 33 percent of exports and 3 percent of GNI.
Pakistan’s external debt-to-exports ratio stood at 324 percent, indicating the substantial size of external obligations relative to the country’s export earnings.
The World Bank’s findings come amid Pakistan’s continued efforts to strengthen external financing, maintain foreign exchange reserves and manage debt repayments through multilateral support, bilateral rollovers and international financial arrangements.
The report, which covers external debt positions at the end of 2025, underscores the importance of improving the terms of external borrowing, expanding export earnings and strengthening debt management to reduce refinancing pressures.
The World Bank said the broader financing environment for developing economies remained challenging, with external debt service payments continuing to absorb significant resources that could otherwise be directed towards infrastructure, education, health and productive investment.
Copyright Business Recorder, 2026
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