{
  "id": 18425771,
  "title": "Country’s external debt nearly doubles in a decade",
  "url": "https://urgent.news/2026/11/06/countrys-external-debt-nearly-doubles-in-a-decade",
  "topic": "world",
  "section": "World",
  "published": "2026-11-06T02:17:18.000Z",
  "source": {
    "name": "Dawn",
    "slug": "dawn",
    "url": "https://www.dawn.com/news/2042485/countrys-external-debt-nearly-doubles-in-a-decade"
  },
  "original_language": "en",
  "account": "Pakistan's total external debt reached $135.1 billion by 2025, nearly doubling within a decade according to the World Bank's International Debt Report 2026. This increase occurred from $68.673 billion in 2015, encompassing public and publicly guaranteed debt of $107.076 billion, private non-guaranteed debt of $17.58 billion, and short-term debt of $10.45 billion. Notably, China held the largest single creditor position with $22.4 billion owed, followed by the World Bank with $19.2 billion and the Asian Development Bank (ADB) with $16.83 billion. The report calculated an average maturity of 16 years for loans from official creditors, a four-year grace period, and an average interest rate of 3.6 percent. In contrast, private credit carried an average interest rate of 8.6 percent, with a three-year repayment period and one-year grace period. While the Middle East, North Africa, Afghanistan, and Pakistan (Menap) region experienced improvements in debt-service and interest ratios, their external debt-to-gross national income ratio rose significantly from 26.7 percent to 29.4 percent in 2025, marking the largest single-year increase among regions. In 2025, China extended loan maturities by $2 billion, while the International Monetary Fund (IMF) provided $2.3 billion in new disbursements under the Extended Fund Facility and Resilience and Sustainability Facility arrangements to aid Pakistan's long-term economic stability. Globally, external debt surged to a record $9.4 trillion in 2025, marking the sharpest increase in four years and a notable return of private creditors to developing country markets. This growth was driven by a 5.5 percent rise in borrowing by low- and middle-income countries (LMICs), led by bond issuances, a weaker US dollar, and increased willingness among investors to lend. However, poorer countries faced some of their highest borrowing costs in decades. Debt service payments also continued to rise for the fifth consecutive year. Despite this, stronger economic growth partly stabilized debt ratios, and net long-term debt transfers turned positive after years of outflows. The increase in external debt was particularly rapid for IDA-eligible countries, climbing 8.1 percent to $1.3 trillion, and for low-income countries, surging 8.9 percent to $262.4 billion, the largest increase since 2020. A weaker US dollar contributed to the rise in debt, accounting for 28.2 percent of the increase in LMICs' external public and publicly guaranteed debt. For several large borrowers from concessional windows, currency valuation gains in 2025 not only offset principal payments but in some cases even reversed debt reductions from 2024, resulting in higher reported balances at year-end despite ongoing debt servicing. Private lending rebounded strongly in 2025, with LMIC debt stock owed to private creditors increasing 5.2 percent to $5 trillion, driven by significant growth in debt owed to both bondholders and commercial banks. LMIC economies grew by 5.1 percent in 2025, prompting lenders' return to these countries; however, many governments paid more to borrow due to high interest rates. The disparity in interest rates between official and private creditors widened further over the past decade, reaching 5.5 percentage points in 2025. Official creditors' average interest rate on new commitments improved to 5.5 percent in 2025, down from 5.8 percent the previous year. In contrast, International Bank for Reconstruction and Development borrowers benefited from improved terms, with an average interest rate of 5.5 percent, a decrease from 5.8 percent in 2024. While debt service burdens remain a concern for LMICs, total debt service payments rose for the fifth consecutive year, increasing 1.9 percent to $1.4 trillion in 2025. Payments to private creditors drove this rise, with payments to bondholders surging 13.7 percent to $363.1 billion. Between 2022 and 2025, LMICs paid $436.1 billion more in debt service than they received in new financing. However, in 2025, long-term debt flows shifted from a net outflow of $118.4 billion in 2024 to a net inflow of $45.4 billion.",
  "summary": "• World Bank’s global debt report shows figure climbed from $68.7bn in 2015 to $135.1bn in 2025 • China remains Pakistan’s largest single creditor • Developing economies’ external debt rises to record high of $9.4tr ISLAMABAD: Pakistan’s total external debt almost doubled to $135.1 billion over the decade ending in 2025, according to the World Bank’s International Debt Report 2026 . The report…",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}