• Retires $14.44bn in FY26
• Total external public debt stands at $98.07bn

ISLAMABAD: Pakistan repaid around $14.44 billion in external loans against $16.16bn it received, mostly for budget support, to shore up foreign exchange reserves, and to strengthen the local currency in 2025-26.

In its annual report on Foreign Economic Assistance (FEA), the Ministry of Economic Affairs (MEA) on Wednesday reported Pakistan’s total external public debt at $98.075bn as of June 30, as it secured fresh commitments of $8.951bn in FY26.

As such, the government missed its $19.923bn target set in the budget for FY26 by about 19pc as total disbursements amounted to $16.16bn, 81pc of the target.

“As of June 30, 2026, Pakistan’s external public debt stood at $98.075bn, while $14.436bn was paid during the year for external public debt servicing, comprising $11.198bn in principal repayments and $3.238bn in interest payments. Net transfers amounted to $4.417bn, indicating an increase in the external public debt stock during the period,” the MEA said.

This meant the total public debt increased by around $6.28bn, or 6.84pc, compared with $91.795bn at the close of FY25 ending on June 30, 2025. “The government paid $13.32bn in 2024-25 on account of debt servicing of external public loans,” the MEA had said in its previous report.

In FY26, $9.375bn was obtained for budgetary support/balance of payments to address fiscal imbalances, strengthen foreign exchange reserves and stabilise the exchange rate. The total disbursements realised under project financing were recorded at $3.435bn, followed by programme financing of $1.329bn and commodity financing of $2.019bn.

Out of the total disbursements of $9.375bn for budgetary support/balance of payments, Naya Pakistan Certificates accounted for 33pc ($3.050bn), followed closely by time deposits from friendly countries at 32pc ($3bn). Foreign commercial banks and bonds jointly contributed 31pc, while the IMF accounted for 4pc.

Project financing remained focused on key development sectors, with significant disbursements directed towards energy and power, environment, climate and resilience, water, transport and communication, education and other social and economic sectors.

Continued engagement with multilateral and bilateral development partners also supported climate change mitigation and adaptation, resilience building, rehabilitation and reconstruction, and disaster risk reduction, the MEA said.

Of the total external public debt at $98.075bn, $59.931bn was obtained from multilateral and bilateral development partners.

Out of the total agreements of $8.951bn in new financing agreed in FY26, $3.808bn, constituting 42pc of the total commitments, were committed for budgetary support and BoP to support fiscal imbalances and stabilise exchange rate.

An amount of $2.768bn (31pc of the total commitments) was earmarked for project financing while $1.407bn (16pc of the total commitments) was secured as programme financing through contributions from Asian Development Bank and World Bank followed by commodity financing of $967 million (11pc) from International Islamic Trade Finance Corporation.

The World Bank, ADB, and IsDB have been the largest contributors amongst the multilateral development partners, contributing $2.025bn (40pc of total multilateral disbursement), $1.772bn (35pc of total multilateral disbursement), and $1.087bn (22pc of total multilateral disbursement) respectively.

On the bilateral side, Saudi Arabia emerged as the largest contributor during the year, disbursing $1.013bn followed by China $501m.

Of the new $8.95bn commitments, $6.809bn were for federal projects and programmes and $2.142bn for provincial projects or programmes.

Published in Dawn, November 12th, 2026