China tops as Pakistan’s largest creditor as the World Bank has recently reported.
China has become Pakistan’s largest creditor, holding 22% of Pakistan’s total external debt, amounting to $28.8 billion, as per the World Bank’s International Debt Report.
Saudi Arabia follows as the second-largest bilateral lender with $9.16 billion, or 7% of the total debt. Among multilateral creditors, the World Bank accounts for 18% of the debt, while the Asian Development Bank contributes 15%.
The report reveals that Pakistan’s external debt, including loans from the IMF, reached $130.85 billion in 2023. This figure is equivalent to 352% of the country’s total exports and 39% of its gross national income (GNI), illustrating a significant burden on its fiscal resources. External debt servicing also posed challenges, consuming 43% of export earnings and 5% of GNI.
In 2023, bilateral lenders accounted for 45% of Pakistan’s external debt, while multilateral institutions held 46%. Private lenders, such as bondholders, made up the remaining 9%.
Pakistan’s long-term external debt stood at $110.44 billion, with $11.53 billion owed to the IMF and $8.88 billion classified as short-term debt.
Pakistan received $12.95 billion in new disbursements during 2023 but repaid $14 billion, including $4.33 billion in interest payments, underscoring a net outflow of funds.
The World Bank highlighted a global surge in debt servicing costs, with developing nations collectively spending $1.4 trillion in 2023. Interest rates hit a 20-year peak, further pressuring economies like Pakistan.
Pakistan’s interest payments equated to 43% of its export revenues, exceeding the global average for low- and middle-income countries, reflecting the country’s acute fiscal stress.
Among South Asian nations, Pakistan recorded the second-highest interest payments on public debt. Rising global interest rates and shrinking fiscal space have exacerbated financial vulnerabilities across the region, including Pakistan.
The report also noted that Pakistan, alongside Egypt and Ukraine, significantly increased repayments to the IMF in 2023. On the brighter side, Pakistan ranked fifth globally in remittance receipts, with $26.6 billion in personal remittances.
Related Posts
