ISLAMABAD: China remains Pakistan’s biggest lender with its debt comprising 22 percent of Islamabad’s total external liabilities, followed by Saudi Arabia with its share of debt comprising seven percent, the World Bank said in its latest report this week.
According to the annual International Debt Report 2024 released by the World Bank on Tuesday, Pakistan’s total debt in the report showed that Islamabad’s total external debt stood at $130.847 billion at the end of 2023. China remains Pakistan’s top bilateral creditor with its debt comprising 22 percent of Pakistan’s total external liabilities or $28.786 billion.
Saudi Arabia comes in second place with its debt comprising 7 percent of Pakistan’s total external liabilities or $9.16 billion.
The South Asian region saw the biggest yearly increase in interest payments in 2023, the report said.
“The increase was most noticeable in Bangladesh and India, whose interest payments increased by more than 90 percent in 2023,” the World Bank’s report said. “Pakistan made the second-largest interest payments in the region.”
The World Bank’s share of debt comprises 18 percent of Pakistan’s total external liabilities, the Asian Development Bank’s comprises 15 percent while other multilateral creditors’ debt comprises 13 percent of Islamabad’s external debts.
Other bilateral lenders’ share comprises 8 percent of Islamabad’s total external liabilities while bondholders comprise 8 percent as well.
Pakistan considers China and Saudi Arabia close regional allies that have invested in the South Asian country for trade and investment purposes. Beijing has invested billions in Pakistan for an infrastructure project that Islamabad hopes will modernize its economy and improve its infrastructure considerably.
Pakistan and Saudi Arabia also enjoy close economic ties. The Kingdom and Islamabad in October signed agreements, including investments in agriculture, semiconductor manufacturing, and energy, worth $2.8 billion.
Pakistan has increasingly eyed closer cooperation with the two countries, with a keen focus on enhanced trade and investment, as it attempts to break free of a macroeconomic crisis that has drained its resources and weakened its national currency.
Islamabad last year avoided a sovereign default by clinching a last-gasp $3 billion loan deal from the International Monetary Fund (IMF). After a fresh 37-month bailout program and declining inflation this year, Pakistan’s economy has registered some gains, with its stock market enjoying a bullish trend for days.
