Pakistan foreign debt interest has cost the country about $16 billion over the past four years, averaging roughly $4 billion a year, State Bank of Pakistan (SBP) Governor Jameel Ahmed said at a post-monetary policy press conference on Monday.
He said the country’s total external debt — money owed to overseas lenders — now stands at around $107 billion. It was already above $100 billion in 2022. The remarks followed the central bank’s decision to raise its policy rate by 50 basis points to 12 percent.
How fast the debt stock grew
Governor Ahmed said Pakistan foreign debt rose by only about $5 billion to $6 billion over the past four years, or roughly $1 billion to $1.25 billion a year. Between 2015 and 2022, he said, external debt grew by about $6.5 billion each year.
He also said that if Pakistan had not taken new foreign borrowing at all, the external debt stock would still have been around $116 billion today because of the interest already paid.
How the interest was paid
About $10 billion to $11 billion of those interest payments were met with dollars the SBP bought from the open market rather than through fresh loans. The central bank purchased more than $30 billion from the market over the period.
Those purchases, he said, also helped lift foreign exchange reserves — dollars and other hard currency held by the SBP — from around $3 billion in early 2023, when they covered only about two weeks of imports, to approximately $21.5 billion now.
Debt mix and what officials expect next
The governor said the structure of external debt has improved. Around 80 percent now comes from multilateral and bilateral lenders, including the World Bank and the Asian Development Bank, compared with about 55 percent in early 2023.
He expects annual foreign loan interest payments to fall below $3 billion next year. The SBP also aims to raise reserves to $23 billion by December 2026 and $25 billion by June 2027.
Timeline: what has happened so far
- 2015–2022: External debt rose by about $6.5 billion a year, the governor said.
- 2022: External debt was already above $100 billion.
- Early 2023: Reserves were about $3 billion (around two weeks of import cover); about 55% of external debt was from multilateral and bilateral lenders.
- Past four years: About $16 billion paid in interest; debt stock rose by about $5–6 billion; the SBP bought more than $30 billion from the market.
- Now: External debt about $107 billion; reserves about $21.5 billion; about 80% of debt from multilaterals and bilaterals.
- Targets ahead: Interest bill expected below $3 billion next year; reserves aimed at $23 billion by December 2026 and $25 billion by June 2027.
Aasan alfaaz mein
Pakistan ne pichle char saalon mein foreign loans ke sood par lagbhag 16 arab dollar ada kiye hain. Kul baharmi qarza ab karib 107 arab dollar hai. Central bank ke mutabiq agle saal sood ki bill 3 arab dollar se kam ho sakti hai. Reserves bhi pehle se behtar hain, jis se import cover zyada mazboot hota hai.
