China leads as external debt touches $135 billion
Pakistan’s external debt has nearly doubled over the past decade, climbing to $135.1 billion in 2025 from $68.67 billion in 2015, according to a World Bank report cited by Dawn. The debt stock comprised $107.07 billion in public and publicly guaranteed loans, $17.58 billion in private non-guaranteed debt and $10.45 billion in short-term borrowing. Of the public debt, multilateral institutions accounted for the largest share at $56.83 billion. Pakistan also owed $42.43 billion to bilateral lenders and $7.8 billion to private creditors. China remained Pakistan’s biggest individual creditor, with outstanding loans of $22.4 billion. The World Bank was next with $19.2 billion, followed by the Asian Development Bank (ADB), to which Pakistan owed $16.83 billion. Loans from official creditors had an average maturity of 16 years, a four-year grace period and an interest rate of 3.6%. Private credit, in contrast, came at a much steeper average interest rate of 8.6%, with a repayment period of three years and a grace period of just one year. However, the region’s external debt-to-gross national income (GNI) ratio rose from 26.7% to 29.4% in 2025. China extended the maturity of $2 billion in loans, while the International Monetary Fund (IMF) disbursed $2.3 billion under its Extended Fund Facility and Resilience and Sustainability Facility programmes, aimed at supporting the country’s longer-term economic stability.
The figures underline the Islamic country’s growing dependence on foreign borrowing to meet its financial needs. The report also highlighted the difference in borrowing costs. Across the Middle East, North Africa, Afghanistan and Pakistan region, debt-service and interest ratios showed improvement. This was the sharpest annual increase recorded by any region, pointing to a continued build-up of external debt. Pakistan also received some relief through fresh financing and loan extensions during the year. You use AI every day. Now get your AI Quotient. Take the AIQ test.