Pakistan's external debt rises to $135.1 billion, with China its largest creditor

Pakistan's external debt has risen to $135.1 billion, according to the World Bank's International Debt Report 2026, adding to the country's economic difficulties. The report says the debt has almost doubled over the past ten years.

According to the report's figures, Pakistan's external debt stood at $68.637 billion in 2015. By the end of 2025 it had reached $135.107 billion, an increase of 96.7 per cent in ten years. In 2024 the figure was $129.92 billion.

The total has three components. Public and publicly guaranteed debt is $107.076 billion, private sector debt is $17.58 billion and short-term debt is $10.45 billion.

China is the largest creditor. The report says Pakistan owes China $22.4 billion, followed by the World Bank with $19.2 billion and the Asian Development Bank with $16.83 billion. Rising debt, a growing interest burden and repayment obligations have made the challenges facing Pakistan more serious.

Of the public and publicly guaranteed debt, $56.83 billion was borrowed from multilateral financial institutions, $42.43 billion from various countries and $7.8 billion from private lenders. In 2025, China extended the maturity of $2 billion of Pakistan's debt, which eased some of the immediate repayment pressure.

The cost of raising debt is also a concern. In 2025, new loans from government or official lenders carried an average interest rate of 3.6 per cent, while new loans from private lenders carried 8.6 per cent. Official loans had an average maturity of 16 years with a four-year grace period. Private loans had an average maturity of only three years and a grace period of just one year.

One relief is that external debt as a share of national income fell from 35.8 per cent in 2024 to 33.9 per cent in 2025. The overall debt figure is still rising, however, so the challenge of managing the economy remains. Whether Pakistan can recover or slips deeper into economic trouble will become clear in the coming period.