External debt doubles in decade

November 7, 2026

Pakistan’s external debt has nearly doubled over the past decade, crossing $135 billion in 2025, according to the latest report released by the World Bank. The figures show the country’s growing dependence on foreign loans to meet its financial needs.

The report states that Pakistan’s external debt stood at around $69 billion in 2015. By 2025, it had increased to more than $135 billion, showing a sharp rise in the country’s borrowing from foreign governments and international financial institutions.

Of the total amount, more than $107 billion is public and publicly guaranteed external debt. This means the government is directly responsible for a major share of the country’s foreign debt or has guaranteed its repayment. Meanwhile, private sector external debt, which is not guaranteed by the government, stood at $17.58 billion.

Pakistan’s short-term external debt has also reached $10.45 billion. Such debt adds to the country’s financial pressure because it requires repayment within a relatively short period.

The report also highlighted Pakistan’s efforts to manage its growing debt burden through support from international partners. China extended the repayment period of $2 billion in loans to Pakistan in 2025, providing some breathing space for the country’s external financing needs.

During the same year, the International Monetary Fund (IMF) provided another $2.3 billion to Pakistan under its Extended Fund Facility (EFF) and Resilience and Sustainability Facility (RSF) programmes.

Pakistan also has significant outstanding loans from multilateral financial institutions. According to the report, the country owes $16.83 billion to the Asian Development Bank (ADB).

The rising debt figures highlight the challenges facing Pakistan’s economy. A large amount of foreign borrowing means the country must arrange billions of dollars every year to repay loans and meet interest payments. This puts pressure on foreign exchange reserves and increases the need for further borrowing.

The growing dependence on external loans also raises questions about the country’s economic direction. Pakistan needs to increase exports, attract investment, improve tax collection and reduce unnecessary government spending.

Borrowing may provide temporary financial support, but it cannot be a permanent solution. Without strong economic reforms and sustainable growth, the country’s debt burden will continue to create difficulties for future generations.