Pakistan’s external debt remains heavily concentrated with multilateral and bilateral creditors, which account for around 56 percent of the country’s total foreign obligations. The overall external debt stock stands at roughly $92 billion, raising concerns over currency fluctuations and their potential impact on debt servicing.
With the US dollar weakening against major global currencies in recent days, economists warn that further shifts in exchange rates could increase Pakistan’s debt in rupee terms. This could put additional pressure on the country’s debt-to-GDP ratio if the trend continues.
In recent years, Pakistan’s external debt had approached $130 billion, largely due to the US dollar strengthening against currencies such as the euro, Japanese yen, and British pound. The recent softening of the dollar, however, has created fresh uncertainty for emerging economies with large foreign obligations.
According to the Ministry of Finance’s upcoming Debt Policy Statement, which will be presented in parliament, Pakistan’s external debt rose by 6 percent year-on-year, reaching $91.8 billion by the end of June 2025—an increase of roughly $5 billion.
During the first quarter of FY26, external debt fell slightly by 0.4 percent, or $0.35 billion, to $91.4 billion by the end of September 2025.
The statement shows that most 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.
Borrowing from commercial banks also rose by $1.6 billion, largely due to a $1 billion loan secured under an Asian Development Bank (ADB) policy-based guarantee.
Officials said currency movements, borrowing patterns, and global financial conditions will continue to play a key role in shaping Pakistan’s external debt outlook in the coming months.
