Pakistan’s total external debt nearly doubled over the decade ending in 2025, rising from $68.673 billion in 2015 to $135.107 billion, according to the World Bank’s International Debt Report 2026.

The report showed that Pakistan’s external debt included $107.076 billion in public and publicly guaranteed debt. Private non-guaranteed debt stood at $17.58 billion, while short-term debt reached $10.45 billion.

Multilateral Lenders Hold Major Share of Public Debt

Multilateral creditors accounted for $56.83 billion of Pakistan’s public and publicly guaranteed debt. Bilateral lenders were owed $42.43 billion, while private creditors held claims worth $7.8 billion.

China remained Pakistan’s largest single creditor, with outstanding loans of $22.4 billion. The World Bank followed with $19.2 billion, while the Asian Development Bank held $16.83 billion.

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During 2025, China extended the repayment period for $2 billion in loans to Pakistan. Meanwhile, the International Monetary Fund provided $2.3 billion in financing under its Extended Fund Facility (EFF) and Resilience and Sustainability Facility (RSF).

Private Borrowing Carries Higher Interest Costs

The World Bank report highlighted the higher cost of borrowing from private creditors compared with official lenders.

Pakistan’s average interest rate on private debt reached 8.6%, compared with 3.6% on public debt.

Private loans also carried shorter repayment periods. Their average maturity stood at just three years, compared with 16 years for public debt.

The grace period for private borrowing averaged one year. Public loans, meanwhile, offered an average grace period of four years.

Debt Servicing Puts Pressure on Exports

Pakistan’s external debt stood at 34% of its gross national income (GNI). Meanwhile, debt servicing consumed 33% of the country’s export earnings.

These figures highlight the pressure of external repayments on Pakistan’s economy. They also underline the importance of stronger export growth and more sustainable borrowing.

The World Bank called for an effective strategy to reduce the country’s debt burden. It also stressed the need to increase exports and secure more favourable borrowing terms to address long-term repayment challenges.