Pakistan Repays $3.23 Billion in Foreign Debt Interest

News Desk

ISLAMABAD: Pakistan has repaid approximately $14.44 billion in external loans during the fiscal year 2025-26, primarily aimed at bolstering foreign exchange reserves and stabilizing the local currency.

The Ministry of Economic Affairs (MEA) reported that the total external public debt reached $98.075 billion as of June 30, 2026.

The MEA’s annual report on Foreign Economic Assistance revealed that the government secured new commitments of $8.951 billion in FY26.

However, it fell short of its budget target of $19.923 billion by nearly 19%, with total disbursements amounting to $16.16 billion, which is 81% of the target.

The report highlighted that $14.436 billion was paid for external public debt servicing, including $11.198 billion in principal repayments and $3.238 billion in interest payments.

This situation indicates a net increase in the external public debt stock by approximately $6.28 billion, or 6.84%, compared to the previous fiscal year, which closed at $91.795 billion.

The rising debt levels raise concerns about the sustainability of Pakistan’s economic recovery and its ability to meet future financial obligations.

Looking ahead, the government is expected to focus on securing additional financial commitments and implementing measures to enhance economic stability.

Upcoming discussions with international financial institutions may play a crucial role in shaping Pakistan’s fiscal strategy and addressing its growing debt challenges.