How deep is Pakistan's debt dependence on China? The numbers tell the story

China leads as external debt touches $135 billion

Pakistan’s external debt has nearly doubled over the past decade, climbing to $135.1 billion in 2025 from $68.67 billion in 2015, according to a World Bank report cited by Dawn.The figures underline the Islamic country’s growing dependence on foreign borrowing to meet its financial needs.The debt stock comprised $107.07 billion in public and publicly guaranteed loans, $17.58 billion in private non-guaranteed debt and $10.45 billion in short-term borrowing.Of the public debt, multilateral institutions accounted for the largest share at $56.83 billion. Pakistan also owed $42.43 billion to bilateral lenders and $7.8 billion to private creditors.China remained Pakistan’s biggest individual creditor, with outstanding loans of $22.4 billion.

The World Bank was next with $19.2 billion, followed by the Asian Development Bank (ADB), to which Pakistan owed $16.83 billion.The report also highlighted the difference in borrowing costs. Loans from official creditors had an average maturity of 16 years, a four-year grace period and an interest rate of 3.6%. Private credit, in contrast, came at a much steeper average interest rate of 8.6%, with a repayment period of three years and a grace period of just one year.

Across the Middle East, North Africa, Afghanistan and Pakistan region, debt-service and interest ratios showed improvement.However, the region’s external debt-to-gross national income (GNI) ratio rose from 26.7% to 29.4% in 2025. This was the sharpest annual increase recorded by any region, pointing to a continued build-up of external debt.Pakistan also received some relief through fresh financing and loan extensions during the year. China extended the maturity of $2 billion in loans, while the International Monetary Fund (IMF) disbursed $2.3 billion under its Extended Fund Facility and Resilience and Sustainability Facility programmes, aimed at supporting the country’s longer-term economic stability.