Pakistan's external debt has nearly doubled over the past decade, surging from $68.7 billion in 2015 to $135.1 billion in 2025 — a rise of almost 97% — with China holding the largest bilateral creditor position, according to an analysis by Dawn. The scale of accumulation underscores deepening fiscal stress for a country that has repeatedly turned to emergency international support to service its obligations.

Debt Breakdown: Who Pakistan Owes

The $135.1 billion total external debt stock is composed of $107.1 billion in public and publicly guaranteed debt, $17.6 billion in private non-guaranteed debt, and $10.5 billion in short-term obligations. Among public sector liabilities, multilateral lenders are owed $56.8 billion, while bilateral creditors hold $42.4 billion.

China leads among individual creditors with outstanding loans of $22.4 billion, followed by the World Bank at $19.2 billion and the Asian Development Bank (ADB) at $16.8 billion. Beijing's dominance reflects years of lending under the China-Pakistan Economic Corridor (CPEC), which critics have described as a source of long-term debt dependency.

Recent Relief and Ongoing Pressure

During 2025, Pakistan received significant external support to manage its repayment calendar. China extended a $2 billion loan maturity, effectively rolling over near-term obligations, while the International Monetary Fund (IMF) disbursed $2.3 billion under ongoing support programmes. These measures have provided short-term breathing room, but analysts note that structural vulnerabilities remain largely unaddressed.

Regional and Global Context

The analysis further noted that the Middle East, North Africa, Afghanistan and Pakistan (MENAP) region recorded the sharpest increase in external debt relative to gross national income globally, highlighting continued debt accumulation even as some debt-servicing indicators showed marginal improvement.

Globally, external debt owed by low and middle income countries rose 5.5% to a record $9.4 trillion in 2025. Debt levels in the world's poorest nations climbed even faster, with borrowing costs remaining elevated — countries eligible for concessional financing faced average interest rates of 8.2% on new commitments, reportedly the highest level in decades.

Debt-Service Strain Mounts

Debt-service payments across low and middle income economies rose for a fifth consecutive year, reaching $1.4 trillion, according to the analysis. This persistent repayment pressure comes despite stronger economic growth and improved capital inflows in certain economies, suggesting the trajectory is structural rather than cyclical.

For Pakistan, the combination of a heavily bilateral debt composition, elevated interest rates on new borrowings, and recurring reliance on creditor extensions raises questions about long-term debt sustainability — a debate that is likely to intensify ahead of the country's next IMF programme review.