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Pakistan's Foreign Debt Doubles in 10 Years, China Tops List of Lenders
Sentiment: NeutralHigh Priority
What Happened?
Pakistan's external debt has surged nearly 97% over the past decade, reaching $135.1 billion, with China as its largest creditor. The country faces challenges from high private loan costs.
Key points
- Pakistan's external debt rose from $68.67 billion in 2015 to $135.1 billion in 2025.
- China is the largest individual creditor, lending $22.42 billion.
- Public and publicly guaranteed debt accounts for nearly 79% of total external debt.
- The average interest rate for private loans is significantly higher at 8.6% compared to 3.6% for official loans.
- Pakistan received $2.3 billion from the IMF in 2025 under its Extended Fund Facility.
Key insights
- Increased reliance on Chinese loans may affect Pakistan's geopolitical relationships.
- Higher private loan costs could strain Pakistan's budget and repayment capabilities.
- The significant share of public debt indicates potential future fiscal challenges for the government.
Why it matters
The rising debt levels could impact Pakistan's economic stability and financial independence.
Entities
Pakistan· CountryChina· CountryWorld Bank· OrganizationInternational Monetary Fund· OrganizationAsian Development Bank· Organization
Source
India Today
