The Ministry of Finance has clarified certain assertions made in a recent press commentary regarding the country’s external debt position and associated interest payments.
In a statement, the Ministry said the figures presented in the commentary require contextual explanation to ensure an accurate and comprehensive understanding of Pakistan’s external debt profile.
It said Pakistan’s total external debt and liabilities currently stand at one hundred and thirty-eight billion dollars.
This figure, however, encompasses a broad range of obligations. It is therefore important to distinguish this aggregate figure from External Public (Government) Debt, which amounts to approximately ninety-two billion dollars.
Of the total External Public Debt, nearly seventy-five percent comprises concessional and long-term financing obtained from multilateral institutions, excluding the IMF, and bilateral development partners.
The claim that Pakistan is paying interest on external loans up to eight percent is misleading.
The overall average cost of External Public Debt is approximately four percent, reflecting the predominantly concessional nature of the borrowing portfolio.
During 2022-23, Pakistan faced heightened balance of payments pressures, which led to foreign exchange reserves falling below one month of import cover.
In response, the government entered into an IMF EFF arrangement and mobilized financing from multilateral and other concessional partners.
These measures played a critical role in rebuilding foreign exchange reserves and strengthening the country’s external account position.
The statement said the government remains committed to prudent debt management, transparency, and the continued strengthening of Pakistan’s macroeconomic stability.
