Pakistan’s total external debt and liabilities currently amount to $138 billion, the Ministry of Finance has clarified in response to recent commentary on the country’s external debt position. This figure covers a wide set of obligations, including public external debt, public-sector enterprise borrowings, bank loans, private-sector external loans and intercompany liabilities to direct investors.

However, the Finance Ministry emphasised that this aggregate figure should not be conflated with External Public (Government) Debt, which stands at approximately $92 billion. That distinction is important for accurately understanding Pakistan’s fiscal and external financing profile.

Composition of external public debt

Of the $92 billion in external public debt:

• Around 75 percent consists of concessional and long-term financing from multilateral institutions and bilateral development partners.
• Just 7 percent reflects commercial loans.
• Another 7 percent relates to Eurobonds and similar instruments.

The ministry made clear that these concessional terms help lower the overall cost of government borrowing from external sources.

Average interest cost and recent payments

The Finance Ministry also addressed claims that Pakistan pays up to 8 percent interest on external loans, describing that figure as misleading. Official data shows the average interest cost on external public debt is closer to 4 percent, reflecting the concessional nature of most borrowing.

Interest payments have risen in recent years, with outflows increasing from $1.99 billion in FY2022 to $3.59 billion in FY2025, an 80.4 percent increase over that period, still lower than some reports suggested.

Context and government stance

The Finance Ministry said the clarification was issued to provide context and accuracy amid public discussion about Pakistan’s debt levels and cost of borrowing. It stressed that proper interpretation is key to informed debate on fiscal policy and external financing.

Authorities also highlighted the role of multilateral support and concessional financing in stabilising Pakistan’s external balance in recent years, particularly during episodes of foreign exchange reserve strain.