Pakistan's foreign debt doubles in 10 years, China tops list of lenders

Pakistan’s external debt grew by about $66.43 billion over the decade from 2015 to 2025. That is a rise of nearly 97%, meaning the country’s overseas obligations almost doubled. The total reached $135.1 billion in 2025. This matters because larger debt brings bigger repayment and financing needs.

The debt stood at $68.67 billion in 2015. By 2025, it had climbed to $135.1 billion. The latest figure was 4% above the previous year. It included public and publicly guaranteed debt, private non-guaranteed debt, and short-term obligations.

Public and publicly guaranteed borrowing made up $107.07 billion of the 2025 total. Private non-guaranteed debt was $17.58 billion, while short-term debt added $10.45 billion. The increase shows Pakistan remains heavily dependent on overseas borrowing to meet its financial needs, while higher costs and repayment pressure continue to challenge its finances.

External debt is borrowing owed to lenders outside a country. It can involve governments, international institutions, banks, or other overseas creditors. Domestic debt is owed to lenders inside the country. The distinction matters because external borrowing creates repayment needs involving foreign lenders and overseas financing.

Pakistan’s reported external debt covers three parts. Public and publicly guaranteed debt stood at $107.07 billion in 2025. Private non-guaranteed debt totaled $17.58 billion. Short-term obligations added $10.45 billion. Together, these categories produced the $135.1 billion external-debt total.

The article focuses on overseas obligations rather than debt borrowed within Pakistan. External debt can support a country’s financial needs, but repayment terms matter. Pakistan’s private loans carried an average 8.6% interest rate and three-year maturity in 2025, creating more immediate pressure than many official loans. The article does not provide Pakistan’s domestic-debt total.

Pakistan owes money to multilateral institutions, bilateral country lenders, and private creditors. In 2025, its public and publicly guaranteed external debt included $56.83 billion owed to multilateral institutions and $42.44 billion owed to bilateral creditors. China was the largest individual country creditor, while the multilateral total was larger collectively.

China’s outstanding lending reached $22.42 billion. The World Bank’s International Development Association, or IDA, accounted for $19.21 billion, and the Asian Development Bank held $16.83 billion. Other multilateral creditors accounted for another $20.79 billion. Thus, no single multilateral institution exceeded China’s lending in the figures provided.

The difference comes from how creditors are grouped. China represents one country, while the multilateral category combines several institutions. China therefore ranks first as an individual creditor, even though multilateral lenders together provided the larger share. The figures underline China’s significant position, alongside the continuing importance of international development institutions.

Public and publicly guaranteed debt is borrowing owed by the government or by entities whose debt carries a public guarantee. Pakistan’s total external debt reached $135.1 billion in 2025. Of that amount, $107.07 billion was public or publicly guaranteed, or nearly 79%.

The remaining external debt consisted of $17.58 billion in private non-guaranteed borrowing and $10.45 billion in short-term obligations. The public share is therefore much larger than either category. It also includes borrowing supported by public guarantees, even when the original borrower is not the central government.

This matters because repayment obligations can fall on the government or publicly backed entities. A large public share can increase pressure on public finances when debt payments come due. Pakistan also owed $56.83 billion to multilateral institutions and $42.44 billion to bilateral creditors, showing that official overseas lenders are central to its public borrowing structure.

Private loans create more pressure because they cost more and must usually be repaid sooner. In 2025, new commitments from private creditors carried an average interest rate of 8.6%. Official creditors charged an average 3.6%. Higher interest increases the cost of borrowing and raises future repayment needs.

The repayment timetable was also much shorter. Official loans had an average maturity of 16 years and a four-year grace period. Private loans averaged only three years to maturity and one year before repayments began. Pakistan therefore has less time to arrange money after taking private loans.

These terms can intensify financing pressure when several payments fall due close together. The article identifies private borrowing as an important pressure point for Pakistan’s finances. Official loans are not cost-free, but their lower average rates, longer maturities, and longer grace periods provide more time to manage repayments.

Extending a loan’s maturity postpones the repayment deadline. That can temporarily reduce the amount Pakistan must arrange immediately, giving its finances more breathing room. It does not erase the borrowing, but it spreads the timing of obligations and can ease near-term pressure.

The World Bank report noted that China extended the maturity of around $2 billion in loans due for repayment in 2025. This gave Pakistan additional time to meet those obligations. The IMF also disbursed $2.3 billion in 2025 under its Extended Fund Facility and Resilience and Sustainability Facility arrangements.

The two forms of support work differently. China’s extension delays payments, while IMF funding provides new disbursements as Pakistan manages its external financing requirements. Together, they can help Pakistan handle immediate repayment needs and support efforts toward economic stability. However, the article presents this relief as breathing room, not as a reduction in total external debt.

Countries borrow from abroad to meet financial needs that available domestic resources cannot cover. Overseas loans can provide funding for government needs and other borrowers. External borrowing becomes risky when debt grows faster than the country’s ability to manage interest and repayments.

Pakistan’s external debt rose from $68.67 billion in 2015 to $135.1 billion in 2025. Private creditors charged an average 8.6% on new commitments, compared with 3.6% from official creditors. Private loans also averaged three-year maturities, creating shorter deadlines for finding repayment funds.

A debt crisis can develop when payments become difficult to meet and a country must seek extensions, new loans, or emergency support. Pakistan received an extension on around $2 billion in Chinese loans and $2.3 billion from the IMF in 2025. These measures provide breathing room, but the article shows that high debt, costly private borrowing, and short maturities remain pressure points.