Overview
- The World Bank's International Debt Report released Thursday found external debt for low‑ and middle‑income countries rose 5.5% in 2025 to a record $9.4 trillion, driven by more borrowing and currency valuation effects.
- Private creditors and public‑entity bond issuance returned strongly in 2025, with borrowing from private sources and bond deals rising about 35% to $251 billion, but new private loans averaged roughly 8.2%–9.4% in interest.
- Developing countries paid $1.4 trillion in principal and interest in 2025, the fifth straight annual increase, which raises the risk that debt service will crowd out spending on health, education and infrastructure.
- Pakistan’s external debt nearly doubled over the decade to $135.1 billion by end‑2025, composed mainly of $107.1 billion in public and publicly guaranteed debt, with China the single largest bilateral creditor at about $22.4 billion.
- The World Bank urged clearer debt transparency, stronger debt‑management capacity and expanded concessional finance as governments, the IMF and bilateral lenders weigh short‑term rollovers against longer‑term sustainability risks.