WorldPosted at: Nov 6 2026 10:05PM


Pakistan’s external debt nearly doubled to $135bn in a decade: World Bank report

Islamabad, Nov 6 (UNI) Pakistan’s external debt nearly doubled to $135.1bn in 2025 from $68.67bn in 2015, highlighting the country’s growing reliance on foreign borrowing, according to the World Bank’s International Debt Report 2026.
The total included $107.08bn in public and publicly guaranteed debt, $17.58bn in private non-guaranteed debt and $10.45bn in short-term obligations.
Of the public and publicly guaranteed debt, $56.83bn was owed to multilateral creditors, $42.43bn to bilateral lenders and $7.8bn to private creditors, Dawn reported.
China was Pakistan’s largest individual creditor, with $22.4bn outstanding, followed by the World Bank with $19.2bn and the Asian Development Bank (ADB) with $16.83bn.
The report found that loans from official creditors had an average maturity of 16 years, a four-year grace period and an average interest rate of 3.6%. Private credit was considerably more expensive, carrying an average interest rate of 8.6%, an average repayment period of three years and a one-year grace period.
In 2025, China extended the maturities on $2bn in loans to Pakistan, while the International Monetary Fund (IMF) disbursed $2.3bn through its Extended Fund Facility and Resilience and Sustainability Facility arrangements to support the country's longer-term economic stability.
Across the wider West Asia, North Africa, Afghanistan and Pakistan (Menap) region, debt-service and interest ratios improved. However, external debt as a proportion of gross national income (GNI) increased from 26.7% to 29.4% in 2025, marking the largest single-year rise among the regions covered by the report.
Globally, external borrowing by low- and middle-income countries (LMICs) rose sharply in 2025, recording its fastest increase in four years as private creditors returned to developing-country markets.
Their external debt climbed 5.5% to a record $9.4 trillion, driven by a rebound in bond issuance, a weaker US dollar and renewed investor appetite for lending. However, access to international capital markets came at a high cost, particularly for poorer countries, which faced some of their highest borrowing rates in decades.
Debt-service payments also increased for the fifth consecutive year, although stronger economic growth helped stabilise some debt ratios. Net long-term debt transfers turned positive after several years of outflows.
Countries eligible for International Development Association (IDA) financing recorded an even faster increase, with external debt rising 8.1% to $1.3 trillion. Low-income countries saw an 8.9% increase to $262.4bn, their sharpest rise since 2020.
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