National Debt Of Pakistan

The national debt of Pakistan (), or simply Pakistani debt, is the total public debt, or unpaid borrowed funds carried by the Government of Pakistan, which includes measurement as the face value of the currently outstanding treasury bills (T-bills) that have been issued by the federal government.

History

In 2008 when Pakistan Peoples Party (PPP) had won the election, Pakistan's debt was which increased by 135% in the next five years of PPP tenure, and became in 2013. Majority of this increase in debt was in domestic debt in which external debt of Pakistan increased by 22 percent, from in 2008 to in 2013. PPP government was dependent on domestic and international lending to meet the needs of the government expenditures. Total debt increased to 64 percent of the GDP but external debt as a percentage of GDP decreased from 29.5 percent to 23.4 percent.

After 2013 Pakistani general election, Nawaz Sharif came to power. During their rule of five years, Pakistan's external debt increased from to , an increase of 144 percent, mainly due to the China-Pakistan Economic Corridor, for which loans were taken from China and all contracts awarded only to Chinese companies, the consequent high imports from China (not offset by any significant exports to China), and also Sukuk bonds.

After 2018 Pakistani general election, Imran Khan came to power. During his rule of 3 years still today Pakistani external debt increased from to an increase of 35.3 billion USD (214 percent).

According to a report by the International Monetary Fund, Pakistani owes China 30% of its $100 billion foreign debt. China has now become the biggest bilateral lender to Pakistan, surpassing all other creditors.

Public debt

As of June 2023, Total Public Debt and Liabilities of Pakistan is estimated to be about / which is 74.3 percent of gross domestic product (GDP) of Pakistan. About ( as of June 2024) is owed by the government to domestic creditors, and about s/$6 Billion owed by Public Sector Enterprises (PSEs).

Pakistan is facing a "huge external financing gap" of $4 billion, with China, Saudi Arabia, and the UAE expected to provide additional support. The IMF is seeking to fund its program and secure $7 billion for debt repayment, current account deficit financing, and increasing foreign exchange reserves. The talks between Pakistan and the IMF were delayed due to concerns over the credibility of the government's assurances and the reliability of foreign loans. Despite some agreement on reform actions and measures, there are still outstanding issues and the IMF has expressed concerns about the government's ability to fulfill past commitments.

(The now former) Foreign Minister Bilawal Bhutto Zardari of Pakistan asked the International Monetary Fund to soften the conditions of its bailout package to help the country protect flood victims from rising prices.

IMF urged Pakistan to hike its general sales tax rate to at least 18% in an effort to bolster revenue. The country's debt servicing costs are expected to surge to a high of Rs. 5.2 trillion in the current fiscal year. The IMF demand was made as the government shared its revised macroeconomic projections showing inflation rising to 29% and economic growth rate slowing to 1.5%, which will lead to higher unemployment and poverty in the country and debt-driven rising prices, food insecurity, and a growing debt burden add to Pakistan's other challenges and no doubt Inflation is running above 38 percent annually. As Pakistan's rupee experiences a significant depreciation and its foreign exchange reserves dwindle, the nation is facing challenges in importing crucial goods such as food, which has even resulted in tragic stampedes at distribution centers. This has raised concerns within Pakistan about the country's ability to meet its debt obligations.

Pakistan boasts one of the world's highest debt-to-GDP ratios and has procured a substantial sum of funds from international financial institutions to fulfill its financial requirements. This borrowing pressure has diminished the nation's foreign exchange reserves and resulted in the devaluation of its currency.

In June 2025, China rolled over $3.4 billion in commercial loans to Pakistan, providing a temporary relief to Islamabad’s critically low foreign reserves. According to a source from Pakistan's Finance Ministry (as reported by Reuters), the rollover includes a $2.1 billion deposit with the State Bank of Pakistan and the refinancing of a $1.3 billion commercial loan that had already been repaid.

While the move helped Pakistan meet the International Monetary Fund (IMF) requirement of maintaining over $14 billion in foreign reserves by June 30, 2025, it also highlights the country's growing dependence on external borrowing, particularly from China. The continued reliance on debt rollovers, rather than repayment, underscores Pakistan’s worsening debt sustainability and rising external debt-to-GDP ratio.

External debt

As of December 2023, Pakistan's total external debt is $131.159 billion. Pakistan owes to Paris Club, to multilateral donors, to International Monetary Fund, and to international bonds such as Eurobonds, and Sukuks.

According to a report by AidData, Pakistan's total external debt owed to China amounted to $68.91 billion as of November 2023. The research identified 433 Chinese-funded projects in Pakistan from 2000 to 2021, making Pakistan the third-largest recipient of Chinese overseas funding in this period, after Russia and Venezuela. The report also states that between 2012 and 2021, Pakistan received emergency rescue loans from China each year to avert balance of payments crisis, and in 2020, China rescheduled at least one of these loans.

While the move helped Pakistan meet the International Monetary Fund (IMF) requirement of maintaining over $14 billion in foreign reserves by June 30, 2025, it also highlights the country's growing dependence on external borrowing, particularly from China. The continued reliance on debt rollovers, rather than repayment, underscores Pakistan’s worsening debt sustainability and rising external debt-to-GDP ratio.

References

{{DEFAULTSORT:National debt of Pakistan

Government of Pakistan
Economy of Pakistan
Pakistani budgets
Government debt by country