Pakistan spent approximately $16 billion on interest payments for foreign loans during the last four years. This total equates to an average annual interest expenditure of about $4 billion.
The nation's total external debt currently sits at roughly $107 billion. Debt levels surpassed the $100 billion mark in 2022.
Jameel Ahmed, Governor of the State Bank of Pakistan, stated that the external debt would have reached about $116 billion today if the country had not borrowed at all. Between $10 billion and $11 billion of these interest payments were settled using dollars purchased from the market.
The State Bank of Pakistan acquired more than $30 billion from the market during this period. Foreign exchange reserves climbed from roughly $3 billion in early 2023 to about $21.5 billion currently.
External debt increased by only $5 billion to $6 billion over the past four years. The debt grew by approximately $1 billion to $1.25 billion annually during that same timeframe.
In contrast, external debt rose by around $6.5 billion every year between 2015 and 2022. Multilateral and bilateral lenders now provide about 80 percent of the external debt.
This proportion was 55 percent in early 2023. Jameel Ahmed suggested that annual interest payments might drop below $3 billion next year.
The State Bank of Pakistan increased the policy rate by 50 basis points to 12 percent.
