The growing risk of a decline in the value of the US dollar against other major currencies has raised concerns about an increase in Pakistan’s external debt obligations, potentially putting additional pressure on the country’s overall debt position.
According to available data, Pakistan’s total external debt currently stands at around 92 billion dollars, of which 56 percent consists of multilateral and bilateral loans denominated in various foreign currencies.
Over the past few years, Pakistan’s external debt and liabilities have remained close to 130 billion dollars, largely due to the stability of the US dollar against other currencies such as the euro, Japanese yen, and British pound, which helped contain the overall debt value.
However, in recent days, the US dollar has started to weaken, raising the possibility that if the current currency trend continues, Pakistan’s debt-to-GDP ratio could rise sharply during the ongoing quarter.
In its Debt Policy Statement presented to parliament, the Ministry of Finance reported that by the end of June 2025, Pakistan’s external debt had increased by 6 percent on a year-on-year basis to 91.8 billion dollars, reflecting an increase of around 5 billion dollars.
The report also noted that during the first quarter of fiscal year 2026, external debt recorded a slight decline of 0.4 percent, or approximately 0.35 billion dollars, indicating a modest short-term improvement.
