Finance1 min read

Pakistan's external debt nearly doubles to $135 bn in 10 years, China biggest lender

By · Via Times of India · Published by Everything Blog

In short

The expansion of Pakistan's external debt portfolio was driven primarily by public and publicly guaranteed obligations, which reached $107.076 billion. Borrowing conditions varied drastically, with official lenders offering 16-year average maturities at 3.6 percent interest, while private debt carried a costly 8.6 percent rate over just three years. Recent balance-of-payments relief arrived in 2025 through $2.3 billion in disbursements from International Monetary Fund facilities alongside debt relief from Beijing.

Key points

  • Multilateral and bilateral partners provided much more favorable loan terms and longer gr…: Multilateral and bilateral partners provided much more favorable loan terms and longer grace periods than private market lenders.
  • Bilateral debt restructuring proved critical in 2025 as China extended the maturities on…: Bilateral debt restructuring proved critical in 2025 as China extended the maturities on $2 billion in loans.
  • Rising regional liabilities drove the debt-to-gross national income ratio across the Midd…: Rising regional liabilities drove the debt-to-gross national income ratio across the Middle East, North Africa, Afghanistan, and Pakistan region to 29.4 percent.

Sources checked by our analysis pipeline: 1

Pakistan's external borrowing has nearly doubled in the last 10 years, reaching $135.1 billion in 2025, with China accounting for the largest share of the country's outstanding debt among individual creditors.

The increase comes as borrowing by developing economies also accelerated, taking the external debt of low- and middle-income countries to a record $9.4 trillion, according to the World Bank's International Debt Report 2026.

Pakistan's external debt stood at $68.673 billion in 2015 before rising to $135.107 billion in 2025, Dawn reported, citing the World Bank report.

Public and publicly guaranteed borrowing made up the bulk of the debt at $107.076 billion. This was followed by private non-guaranteed debt of $17.58 billion and short-term debt of $10.45 billion.

A breakdown of the public and publicly guaranteed component shows that multilateral institutions accounted for $56.83 billion, while bilateral creditors were owed $42.43 billion. Private creditors held claims worth another $7.8 billion.

Among individual lenders, China had the highest outstanding exposure to Pakistan at $22.4 billion.

The World Bank followed with $19.2 billion, while the Asian Development Bank (ADB) accounted for $16.83…

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