Pakistan’s total external debt and liabilities stood at approximately $138 billion as of late 2025, according to State Bank of Pakistan data. Public external debt — the portion owed by the government and public sector entities — reached $91.8 billion as of end-June 2025, a 6% increase year-on-year. Understanding the structure of that debt — who holds it, on what terms, and when it falls due — is more useful than the headline number alone.

The creditor map

Multilateral development institutions are Pakistan’s largest creditor category. The World Bank, Asian Development Bank, Islamic Development Bank, and the IMF together account for roughly 56% of Pakistan’s external debt, according to government data. This category is broadly favourable: multilateral loans carry concessional interest rates (often 1–3%), long maturities (25–40 years), and no prepayment pressure. Disbursements in FY2025 included $1.54 billion from the ADB and $1.25 billion from the World Bank, indicating that both debt service and fresh disbursements are running simultaneously.

China is Pakistan’s largest bilateral creditor, accounting for approximately 30% of Pakistan’s foreign debt. This share has grown substantially through CPEC-related financing and bilateral currency swap arrangements. CPEC infrastructure debt is held primarily by China Development Bank and the Export-Import Bank of China, denominated partly in RMB and partly in USD.

Commercial creditors hold a smaller but more interest-rate-sensitive share: Eurobonds and commercial bank loans carry market interest rates and shorter maturities. When global credit conditions tighten, rollover risk in this category reprices rapidly, as Pakistan experienced acutely in 2022–2023.

The cost of carrying this debt

External debt interest outflows reached $3.59 billion in FY2025 — an 80% increase from $1.99 billion in FY2022. This reflects both the growth in total debt outstanding and the rise in global interest rates on floating-rate and commercial instruments. Total annual external debt service — principal repayment plus interest — runs in the range of $25–27 billion per year.

Against total liquid foreign exchange reserves of approximately $22.6 billion (as of June 2026), the single-year debt service coverage ratio is below 1x. Pakistan is therefore structurally dependent on rollover: the ability to refinance maturing obligations with new borrowing rather than paying them down from reserves.

The rollover dependency

Rollover dependency is not unique to Pakistan. Many sovereigns refinance bilateral and commercial debt routinely, and multilateral debt is almost never fully amortised from reserves. The risk arises when lenders decline to roll. Pakistan experienced this in 2022–2023, when a combination of external shocks and fiscal deterioration made commercial refinancing prohibitively expensive, and bilateral creditor support became conditional on policy reform commitments.

The current IMF Extended Fund Facility provides a credibility anchor that keeps the multilateral and bilateral rollover pipeline open. If the programme goes off track — as it has multiple times in Pakistan’s history — rollover risk reprices rapidly and reserve coverage becomes the only buffer between the government and a balance of payments crisis.

What to watch quarterly

Three metrics track the health of Pakistan’s external debt position in real time: (1) IMF review completions and tranche disbursements, which signal whether the external financing pipeline is intact; (2) bilateral rollover confirmations from China, Saudi Arabia, and the UAE, which collectively account for a large share of short-duration bilateral exposure; and (3) the foreign exchange reserve position, which is the last-resort buffer against a rollover failure.

Sources: SBP Statistical Bulletin, February 2025 (Chapter 5: Debt and Liabilities); Business Recorder, “External debt up 6% to $91.8bn YoY,” 2025; PID Press Release No. 239; SBP Annual Report FY2025.