Pakistan’s external debt profile remains heavily tilted toward multilateral and bilateral creditors, with around 56 percent of the country’s total external debt coming from these sources out of an overall stock of roughly $92 billion, amid growing concerns over currency volatility and its impact on debt servicing.
With the US dollar showing signs of weakness against major global currencies in recent days, economists warn that shifts in exchange rates could push up Pakistan’s external debt liabilities in rupee terms and place pressure on the country’s debt-to-GDP ratio if the trend persists.
In recent years, Pakistan’s external debt and liabilities hovered near $130 billion, largely driven by the strengthening of the US dollar against other major currencies such as the euro, Japanese yen, and British pound.
However, the recent softening of the dollar has introduced fresh uncertainty for emerging economies with sizeable foreign obligations.
According to the Ministry of Finance’s upcoming Debt Policy Statement, to be tabled in parliament, Pakistan’s external debt increased by 6 percent year-on-year to reach $91.8 billion by the end of June 2025, reflecting an increase of about $5 billion.
During the first quarter of FY26, external debt edged down slightly by 0.4 percent, or $0.35 billion, to stand at $91.4 billion by the end of September 2025.
The statement shows that the bulk of the increase came from multilateral development partners, including the International Monetary Fund, with borrowing from these sources rising by 8.7 percent, or nearly $4 billion.
At the same time, borrowing from commercial banks increased by $1.6 billion, largely due to a $1 billion loan secured against an Asian Development Bank (ADB) policy-based guarantee.
Officials said currency movements, borrowing patterns, and global financial conditions will remain key factors influencing Pakistan’s external debt outlook in the coming quarters.