ISLAMABAD: Pakistan could face rising external debt pressures as a weakening US dollar alters the value of its foreign liabilities, with multilateral and bilateral loans making up more than half of the country’s nearly $92 billion external debt stock, according to official data.
Recent currency movements have raised concerns that Pakistan’s external debt-to-GDP ratio may climb if the dollar continues to lose ground against major currencies such as the euro, Japanese yen and British pound.
The Ministry of Finance said in its latest Debt Policy Statement that external debt increased by 6% year-on-year to $91.8 billion by the end of June 2025, reflecting an addition of about $5 billion. During the first quarter of fiscal year 2026, the stock eased slightly by 0.4% to $91.4 billion by the end of September.
Officials said much of the increase over the past year came from multilateral lenders, including the International Monetary Fund, with such borrowing rising by nearly 8.7%, or about $4 billion.
Commercial bank borrowing also grew by around $1.6 billion, largely driven by a $1 billion loan secured through an Asian Development Bank policy-based guarantee.
Economists note that Pakistan’s external debt and liabilities have hovered near $130 billion in recent years, with currency fluctuations playing a major role in inflating repayment burdens.