Pakistan's external debt has nearly doubled over the past decade, rising to $135.1 billion in 2025 from $68.7 billion in 2015, according to the World Bank's International Debt Report 2026. The latest figure also marks a roughly 4 per cent increase from $129.9 billion recorded in 2024, underscoring a persistent upward trajectory in the country's external obligations.

Breakdown of the Debt Stock

Of the total $135.1 billion, public and publicly guaranteed obligations accounted for $107.08 billion, while private-sector borrowing without government guarantees stood at $17.58 billion. Short-term external debt contributed an additional $10.45 billion to the total.

Multilateral institutions were the single largest source of public and publicly guaranteed lending, holding $56.83 billion in outstanding claims. Bilateral creditors accounted for $42.43 billion. Within bilateral lending, China remained Pakistan's largest individual country creditor with outstanding loans of approximately $22.4 billion. The World Bank itself was owed around $19.2 billion, while the Asian Development Bank (ADB) held $16.83 billion in outstanding claims.

Borrowing Costs: Official vs Private

The report highlights a stark divergence in borrowing costs depending on the creditor type. New financing commitments from official creditors in 2025 carried an average interest rate of 3.6 per cent, with an average repayment period of 16 years and a grace period of four years. By contrast, new private-sector loans carried an average interest rate of 8.6 per cent, with a maturity of just three years and a grace period of only one year — terms that place considerably greater near-term pressure on external finances.

Debt Sustainability Indicators

Pakistan's external debt-to-gross national income (GNI) ratio stood at 34 per cent in 2025. Crucially, debt-servicing payments consumed 33 per cent of its export earnings during the year — a level that economists typically flag as a vulnerability threshold. This comes amid a broader regional trend: the Middle East, North Africa, Afghanistan and Pakistan (MENAAP) region's external debt-to-GNI ratio climbed to 29.4 per cent in 2025 from 26.7 per cent a year earlier, the largest annual increase among all World Bank regional groupings.

Relief Measures and IMF Support

During the year, China extended the maturity of approximately $2 billion in loans to Pakistan, providing additional repayment flexibility at a time of acute fiscal stress. Meanwhile, the International Monetary Fund (IMF) disbursed $2.3 billion under its Extended Fund Facility (EFF) and Resilience and Sustainability Facility (RSF) programmes. Notably, this combination of Chinese debt rollovers and IMF programme disbursements has become a recurring feature of Pakistan's external debt management in recent years, raising questions about the structural sustainability of its financing model.

The World Bank's findings arrive as Pakistan continues to navigate one of its most prolonged episodes of external financing stress, with policymakers under pressure to stabilise the current account even as debt servicing demands rise.