ISLAMABAD – The Federal Ministry of Finance has stated that Pakistan’s external debt and liabilities stand at $138 billion, while interest payments amounted to $1.99 billion in fiscal year 2022 and $3.59 billion in 2025.
In a statement issued by the Ministry of Finance, it said that Pakistan’s external debt is largely concessional and long-term. Total external debt and liabilities are $138 billion, of which external government debt is approximately $92 billion, and 75 percent of external public debt has been obtained from multilateral and bilateral concessional sources.
The statement clarified that Pakistan is paying an average interest rate of around 4 percent on external loans, and claims of an 8 percent interest rate are misleading. Interest payments were $1.99 billion in FY 2022 and rose to $3.59 billion in FY 2025.
It further said that reports claiming an 84 percent increase in interest payments are incorrect, as the actual increase is 80.4 percent, which includes $1.50 billion paid to the IMF, comprising $580 million in interest.
The Ministry of Finance said that payments included $1.54 billion to the Asian Development Bank, $1.25 billion to the World Bank, $1.56 billion under Naya Pakistan Certificates, and $94 million in interest payments. Additionally, about $3 billion was paid under external commercial loans, including $327 million in interest.
The ministry added that the rise in interest payments is not solely due to an increase in loan volume. During 2022–23, foreign exchange reserves had fallen to less than one month of imports; however, reserves were restored through the IMF Extended Fund Facility (EFF) program and multilateral funding.
It was further stated that the increase in global interest rates added pressure on external payments. The US Federal Reserve had raised interest rates to 5.25–5.50 percent, but the government remains committed to responsible debt management and economic stability.
