Neither the US nor the World Bank, Pakistan is the largest debtor of which country?

Every bread in Pakistan is a loan. This is not a new thing. Pakistan’s total external debt is set to nearly double to US$135.1 billion in the decade ending 2025. This is also not surprising. The information of which has been given in the World Bank’s International Debt Report 2026. But do you know who Pakistan is the biggest debtor to? The biggest name in this list is neither the US nor the World Bank. Let us also tell you from whom Pakistan has taken maximum loans. Also how much debt has increased on every Pakistani.

How much has Pakistan’s external debt burden increased?

According to a report published in newspaper Dawn, Pakistan’s foreign debt was $68.673 billion in 2015, which will increase to $135.107 billion by 2025. This debt includes $107.076 billion of public and government guaranteed debt, $17.58 billion of private sector unguaranteed debt and $105 billion of short-term debt. Of the total public and government-guaranteed debt, $56.83 billion is owed to multilateral creditors, $42.43 billion to bilateral creditors, and $7.8 billion to private creditors.

To whom is Pakistan the biggest debtor?

China is Pakistan’s largest lender. China owes Pakistan 22.4 billion US dollars. China extended two billion dollar loan to Pakistan till 2025. If we try to understand it in detail, China’s debt to Pakistan in Pakistani rupees is 61,96,40,00,00,000 rupees. Currently the total population of Pakistan is 260,660,118. If China’s debt is shared equally among all, then every Pakistani born a few moments ago would owe China 23,772 rupees.

World Bank and ADB loans

According to the report, after this the World Bank has 19.2 billion dollars i.e. 53,11,20,00,00,000 rupees. This means that every Pakistani owes a loan of 20,376 rupees to the World Bank. While the Asian Development Bank (ADB) has a loan of 16.83 billion dollars i.e. 46,55,59,87,50,000 rupees. If this is shared among every Pakistani, the figure will be Rs 17,861. If the total external debt of Rs 3,73,73,97,38,75,000 is shared among every Pakistani, the figure will come to Rs 1,43,382.

Largest rise in foreign debt in four years

At the same time, the International Monetary Fund (IMF) provided $2.3 billion in new financial assistance under the Expanded Fund Facility and the Resilience and Stability Facility to support the country’s long-term economic stability. According to a World Bank report, the overall external debt of low- and middle-income countries (LMICs) will increase rapidly in 2025. This is the largest increase in foreign debt in four years. Along with this, private lenders also returned to developing country markets. Debt-service and interest ratios improved in the Middle East, North Africa, Afghanistan and Pakistan (MENAP) region.

Extend the loan tenure

In 2025, the region’s ‘external debt to gross national income’ (GNI) ratio will increase from 26.7 percent to 29.4 percent. This is the largest increase in any sector in a year, indicating a continued increase in debt. In 2025, China extended the loan period of 2 billion US dollars to Pakistan. At the same time, the International Monetary Fund (IMF) released a new amount of US$ 2.3 billion under the ‘Extended Fund Facility’ and the ‘Resilience and Sustainability Facility’ to support the country’s long-term economic stability. Overall, there was a big jump in debt taken on by low- and middle-income countries (LMICs) in 2025. This is the largest increase in external debt in four years and reflects the strong return of private lenders to developing country markets.

An ever-increasing debt burden

External debt rose 5.5 percent to a record high of US$9.4 trillion as bond issuance activity picked up, the US dollar weakened and investors showed more interest in refinancing. But reopening capital markets has come at a high price, especially for the poorest countries, which faced the highest borrowing costs (interest rates) in decades.

Debt service payment burden also increased for the fifth year in a row. Despite this, strong economic growth helped stabilize some debt ratios, and after several years of capital inflows, net long-term debt transfers have now turned positive. The increase in external debt was even faster for countries eligible for financing from the International Development Association (IDA) – rising 8.1 percent to US $1.3 trillion. At the same time, for low-income countries, it increased by 8.9 percent to US$ 262.4 billion, the largest increase since 2020.