China Extends Loan Tenure, IMF Adds $2.3 B as Pakistan’s Debt Burden Grows

New Delhi – Pakistan’s external debt load has surged to $135.1 billion in 2025, according to the World Bank’s 2026 International Debt Report, nearly twice the amount recorded in 2015 ($68.7 billion).

Compared with the $129.9 billion figure for 2024, the debt rose by roughly four percent.

The composition includes $107.08 billion of public or government‑backed debt and $17.58 billion of private, non‑guaranteed borrowing. Short‑term liabilities total $10.45 billion.

Multilateral institutions remain the primary source, contributing $56.83 billion, while bilateral creditors hold $42.43 billion.

China is Pakistan’s biggest bilateral lender, with an outstanding balance of about $22.4 billion. The World Bank and Asian Development Bank also feature, with debts of $19.2 billion and $16.83 billion respectively.

Official lenders offered financing at an average interest rate of 3.6 percent, a repayment horizon of 16 years and a four‑year grace period. Private‑sector financing was more costly, averaging 8.6 percent interest, a three‑year maturity and a one‑year grace.

External debt represented 34 percent of Pakistan’s gross national income in 2025, and export revenues were used to service about 33 percent of the debt.

China recently extended the maturity of a $2 billion loan, providing Pakistan with additional time to meet its obligations. The IMF disbursed $2.3 billion through its Extended Fund Facility and Resilience and Sustainability Facility to support the country’s balance of payments.

The World Bank warns that the wider MENAP region (Middle East, North Africa, Afghanistan and Pakistan) faces mounting debt risks, with the debt‑to‑GNI ratio climbing from 26.7 percent in 2024 to 29.4 percent in 2025, the steepest year‑on‑year rise among its regional groupings.