According to the latest World Bank report, Pakistan’s external debt has nearly doubled over the past decade, surpassing $135 billion in 2025. The development has heightened concerns over the country’s growing debt burden.
The World Bank’s 2026 International Debt Report states that Pakistan’s external debt stood at $68.673 billion in 2015, but rose to $135.107 billion in 2025.
According to the report, $107.760 billion of Pakistan’s total external debt consists of government debt and loans guaranteed by the state. The country’s private sector also holds $17.580 billion in external debt, for which the government has not assumed repayment responsibility. In addition, Pakistan’s short-term external debt stands at $10.450 billion.
The World Bank noted that Pakistan has borrowed the largest share of its funds from multilateral financial institutions. According to the report, the country owes $56.830 billion to these institutions, $42.430 billion to various countries, and $7.8 billion to private creditors.
China, with $22.4 billion in outstanding loans to Pakistan, is the country’s largest bilateral creditor. Pakistan has also borrowed $19.2 billion from the World Bank and $16.830 billion from the Asian Development Bank.
The report also highlights significant differences in loan repayment terms. Loans obtained from multilateral financial institutions have an average repayment period of 16 years and an annual interest rate of 3.6 per cent. Borrowers are also granted a four-year grace period before repayments begin.
By contrast, Pakistan’s loans from private creditors carry an average interest rate of 8.6 per cent, an average repayment period of just three years, and a grace period of only one year before repayments commence.
According to the World Bank’s assessment, the ratio of external debt to gross national income (GNI) has also increased across the Middle East, North Africa, Afghanistan and Pakistan (MENAAP) region. The figure reached 29.4 per cent in 2025, compared with 26.7 per cent in 2024.
The World Bank stated that the 2.7-percentage-point increase represented the highest annual rise among all regions worldwide.
The report further reveals that China extended the repayment deadline for $2 billion in Pakistani debt in 2025.
Meanwhile, the International Monetary Fund (IMF) has also provided Pakistan with new loans worth $2.3 billion under two financial programmes.
Writer:Roya Stanikzai
