Pakistan’s total external debt nearly doubled in the ten years to the end of 2025, climbing from $68.67 billion to $135.11 billion, according to the World Bank’s International Debt Report 2026. The figures, reported in Pakistan on 6 November, show how sharply the country’s reliance on foreign borrowing has grown — and how much of that debt is now owed to a small group of big lenders, led by China.
The report puts the increase at roughly $66.4 billion over the decade, a rise of about 97 per cent. The debt stock also kept growing during 2025 itself, rising from $129.92 billion a year earlier — an increase of around 4 per cent in a single year.
It is important to be clear about what the headline number covers. The $135.1 billion is Pakistan’s total external debt at the end of 2025: everything the country owes to foreign lenders, including government-backed borrowing, private-sector debt and short-term obligations. It is not the same as loans taken directly by the federal government, and it is a snapshot of the end of last year rather than the debt level today.
Debt nearly doubles in ten years
A decade ago, Pakistan owed the rest of the world $68.67 billion. By the end of 2025 that figure had reached $135.11 billion — almost twice as much. The climb was steady rather than sudden, but the scale of it is striking: in ten years the country added about $66.4 billion to its foreign liabilities, roughly the same amount as the entire debt stock it carried in 2015.
The composition of that debt matters as much as its size. Public and publicly guaranteed debt — borrowing by the government and by state-backed entities — accounted for $107.08 billion of the total. Private non-guaranteed debt, owed by companies without a government guarantee, stood at $17.58 billion, while short-term obligations added a further $10.45 billion.
Short-term debt is the part economists watch most closely, because it has to be repaid or rolled over quickly. At $10.45 billion it is a relatively small slice of the total, but it still means billions of dollars must be found or refinanced every year on top of the longer-term repayment schedule.
Who Pakistan owes the money to
The World Bank’s breakdown shows that multilateral institutions — lenders such as the World Bank itself and the Asian Development Bank — held the largest share of Pakistan’s public and publicly guaranteed debt, at $56.83 billion. Bilateral lenders, meaning other governments, accounted for $42.43 billion, while private creditors held $7.8 billion.
Among individual lenders, one name stands well clear of the rest. China remained Pakistan’s largest single creditor, with about $22.4 billion outstanding at the end of 2025. The World Bank itself was second at $19.2 billion, followed by the Asian Development Bank at $16.83 billion. Together, those three creditors alone account for more than $58 billion — well over 40 per cent of the country’s total external debt.
China’s position as the biggest lender is not new, but the report underlines how central Beijing has become to Pakistan’s external finances. In 2025, China also extended the repayment period on around $2 billion of loans, giving Islamabad more time to meet those obligations — a form of relief that has become a regular feature of the relationship.
What the loans cost — and the relief in 2025
Borrowing from official lenders has not been expensive by the standards of commercial debt. Loans from official financial institutions carried an average interest rate of 3.6 per cent, with an average maturity of 16 years including a four-year grace period, according to the report. Those generous terms are one reason governments keep turning to multilateral and bilateral lenders rather than international bond markets.
Even so, the sheer size of the stock means the annual bill is heavy. Every year Pakistan must find billions of dollars for interest payments and for repaying loans as they fall due — money that has to be earned through exports, remittances and fresh borrowing, or drawn from the central bank’s foreign exchange reserves.
There was some relief in 2025. Alongside China’s maturity extension, the International Monetary Fund provided $2.3 billion in fresh financing under its Extended Fund Facility and the Resilience and Sustainability Facility, supporting Pakistan’s longer-term economic stability. The IMF’s backing also matters because it unlocks lending from other institutions, which treat a Fund programme as a seal of approval.
Why it matters now
The debt figures land at a sensitive moment. Pakistan’s public debt has already hit Rs91 trillion in the current fiscal year, and the IMF has warned that growth of 3.5 per cent is not enough and that deep reforms are needed before its programme ends in 2027. Against that background, a near-doubling of external debt in a decade sharpens the question of how the country pays its way in the world.
None of this means the debt is unpayable. Much of it is long-term, low-interest borrowing from official lenders, and Pakistan has continued to service its obligations. But the World Bank’s numbers show the direction of travel clearly: the country owes far more abroad than it did ten years ago, it owes the most to China, and the bill for servicing that debt will shape every budget decision for years to come.
For ordinary Pakistanis, the link is indirect but real. Foreign debt is repaid in dollars, and dollars come from exports, remittances and reserves. When the repayment bill grows, the pressure on the rupee, on fuel and food prices, and on the government’s room to spend at home grows with it. That is why a report about a number from the end of 2025 still matters in November 2026 — and why the next few years of repayments will be watched so closely.
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