ISLAMABAD: The World Bank’s latest International Debt Report 2024 said that Pakistan’s external debt has reached $130.847 billion by the end of 2023.
The external debt in 2022 stood at $127.708 billion.
As per reports, the rise in debt comes amid increasing global interest payments, particularly within the South Asian region. ‘
The report highlighted that interest payments in South Asia on public and publicly surged by 62 percent to $12.5 billion in 2023.
Pakistan is the second to record such high payments in the region after Bangladesh and India, where the nations experienced a spike in interest payments by over 90%.
According to the report, interest repayments by IDA-eligible countries have soared to an all-time high of $34.6 billion in 2023.
Interest payments as a percentage of trade earnings, a prime indicator of a nation’s capacity for debt repayment, increased by 1.6 percentage points to 5.8 percent in 2023-it is the highest point since 2005.
Pakistan has ranked among the highest, as 13.6 percent of export earnings were consumed for interest payments. Others are Mozambique interest rate reaching (38.3 percent), Senegal (25.9 percent), Kenya (12.8 percent), and Dominica (10.3 percent).
The increase aggravated the already squeezed fiscal positions of these countries. The report, according to Business Recorder, mentioned that IMF repurchases by low- and middle-income countries, excluding Argentina, more than doubled last year, reaching $12.2 billion. Pakistan, along with Egypt and Ukraine, accounted for a significant portion of these repurchases.
The country has external debt stood at $ 11.532 billion in IMF credit and Special Drawing Rights in the end of 2023, marginally higher than the previous year’s $ 11.522 billion.
In 2023, the total external long-term debt of the country stood at $110.437 billion, up from $107.418 the previous year. Most of it, $92.990 billion, constituted public and publicly guaranteed debt.
Breaking down the creditors, multilateral lenders held 46 percent of Pakistan’s public and publicly guaranteed debt, with the World Bank and Asian Development Bank (ADB) being the largest contributors.
