China continues to be Pakistan’s biggest creditor with loans totaling about $29 billion.
According to a World Bank assessment, the 240 million-person country is also one of the top three receivers of loans from the International Monetary Fund (IMF) this year.
Pakistan’s high debt-to-export & debt-to-revenue ratios point to a deteriorating fiscal condition, according to the World Bank’s International Debt Report, which was made public on Tuesday.
In 2023, Pakistan’s total external debt (including IMF) was estimated by the World Bank to be $130.85 billion, or 352 percent of its total exports and 39 percent of its gross national income (GNI).
The service of Pakistan’s whole external debt accounted for 5 percent of GNI and 43 percent of total exports.
China accounted for 22 percent of Pakistan’s debt, or around $28.786 billion, according to the study. The World Bank came in second with 18 percent ($23.55 billion) and the Asian Development Bank with 15 percent ($19.63 billion).
With 7% of the total debt, or around $9.16 billion, Saudi Arabia was clearly the second-largest bilateral lender to Pakistan.
About 45 percent ($58.88 billion) of the entire foreign debt stock was held by bilateral lenders, and 46 percent ($60.2 billion) by multilaterals.
The remaining 9 percent was held by private lenders, with bondholders holding an 8 percent stake.
In line with the report, out of the $130.85 billion total, $8.878 billion was in short-term foreign debt, $11.53 billion was in IMF credit and allocations, and $110.44 billion was in long-term external debt stocks.
In 2023, there were $12.945 billion in total payments made to Pakistan and $14 billion in total repayments, including $4.33 billion in interest.
As interest rates rose to a 20-year high in 2023, the research claims that developing nations spent a record $1.4 trillion to cover their foreign debt.
Interest payments increased by over a third to $406 billion, placing a strain on many nations’ budgets in vital sectors like the environment, education, and health.
The statistics indicated that the most vulnerable and impoverished nations, those that might borrow from the World Bank’s International Development Association (IDA), were under the most financial duress.
In 2023, these nations made record debt service payments of $96.2 billion.
The payment of interest on public and publicly guaranteed (PPG) debt increased by 62 percent to $12.5 billion in 2023, with South Asia experiencing the largest annual increase, according to the research.
