{"id":41369,"date":"2026-02-22T18:04:27","date_gmt":"2026-02-22T18:04:27","guid":{"rendered":"https:\/\/ipp-news.com\/?p=41369"},"modified":"2026-02-22T18:04:27","modified_gmt":"2026-02-22T18:04:27","slug":"finance-ministry-terms-claims-of-8-interest-on-external-loans-misleading","status":"publish","type":"post","link":"https:\/\/ipp-news.com\/?p=41369","title":{"rendered":"Finance ministry terms claims of 8% interest on external loans ‘misleading’"},"content":{"rendered":"
The Ministry of Finance on Sunday categorically rejected claims regarding the country\u2019s external debt and associated interest payments, calling the reports misleading and stating that the nation\u2019s external debt profile remains predominantly concessional and long-term.<\/p>\n

“Pakistan’s total external debt and liabilities currently stand at $138 billion, while public external debt interest outflows increased from $1.99 billion in FY2022 to $3.59 billion in FY2025, representing an increase of 80.4 per cent, not 84 per cent as reported,” the ministry said in an official statement.<\/p>\n

The ministry stated that the overall average cost of external public debt is approximately 4 per cent, reflecting the predominantly concessional nature of the borrowing portfolio. \u201cIn absolute terms, interest payments rose by $1.60 billion over this period, not $1.67 billion,\u201d it added.<\/p>\n

Read More: Country’s external liabilities soar past $138b<\/p>\n

The clarification came after assertions in a recent press commentary, claiming that interest payments on external debt increased by 84% in three years. Compared to 2022, interest payments last year rose by $1.67 billion. This interest was paid to the IMF, World Bank, Asian Development Bank (ADB), and commercial banks.<\/p>\n

Pakistan is paying interest on external loans at rates of up to 8%. Officials said that Saudi Arabia and China also received interest on safe deposits. Including interest, Pakistan spent $13.32 billion annually on debt servicing. Net external debt increased by $1.71 billion last year.<\/p>\n

Pakistan\u2019s External Debt Profile Remains Predominantly Concessional and Long-Term<\/p>\n

The Ministry of Finance wishes to clarify certain assertions made in a recent press commentary regarding the country\u2019s external debt position and associated interest payments. The figures presented\u2026
\n\u2014 Ministry of Finance, Government of Pakistan (@Financegovpk) February 22, 2026<\/p>\n

The ministry in a statement released today said that, \u201cThe figures presented in the commentary require contextual explanation to ensure an accurate and comprehensive understanding of Pakistan\u2019s external debt profile.\u201d<\/p>\n

It said the total external debt figure includes a broad range of obligations, such as public and publicly guaranteed debt, debt of public sector enterprises (both guaranteed and non-guaranteed), bank borrowings, private-sector external debt, and intercompany liabilities to direct investors.<\/p>\n

It stressed that this aggregate should not be confused with External Public (Government) Debt, which amounts to approximately $92 billion.<\/p>\n

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Of the total external public debt, nearly 75 per cent consists of concessional and long-term financing from multilateral institutions (excluding the IMF) and bilateral development partners.<\/p>\n

\u201cOnly about 7 per cent of this debt consists of commercial loans, while another 7 per cent relates to long-term Eurobonds. In light of this composition, therefore the claim that Pakistan is paying interest on external loans \u2018up to 8 per cent\u2019 is misleading,\u201d the ministry said.<\/p>\n

The statement also provided a breakdown of debt servicing to specific creditors. According to the State Bank of Pakistan:<\/p>\n

\tIMF received $1.50 billion, including $580 million in interest;<\/p>\n

\tNaya Pakistan Certificates payments totalled $1.56 billion, including $94 million in interest;<\/p>\n

\tAsian Development Bank received $1.54 billion, including $615 million in interest;<\/p>\n

\tWorld Bank received $1.25 billion, including $419 million in interest;<\/p>\n

\tExternal commercial loans amounted to nearly $3 billion, with $327 million representing interest payments.<\/p>\n

The ministry added that while interest payments have increased in absolute terms, this rise cannot be attributed solely to an expansion in the debt\u00a0stock.<\/p>\n

\u201cAlthough the overall debt stock has increased slightly since FY2022, the additional inflows have primarily originated from concessional multilateral sources and the IMF\u2019s Extended Fund Facility (EFF) under the ongoing IMF-supported programme,\u201d it stated.<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"

The Ministry of Finance on Sunday categorically rejected claims regarding the country\u2019s external debt and associated interest payments, calling the reports misleading and stating that the nation\u2019s external debt profile remains predominantly concessional and long-term. “Pakistan’s total external debt and liabilities currently stand at $138 billion, while public external debt interest outflows increased from $1.99 […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"class_list":["post-41369","post","type-post","status-publish","format-standard","hentry","category-english-news"],"_links":{"self":[{"href":"https:\/\/ipp-news.com\/index.php?rest_route=\/wp\/v2\/posts\/41369","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ipp-news.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ipp-news.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ipp-news.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/ipp-news.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=41369"}],"version-history":[{"count":0,"href":"https:\/\/ipp-news.com\/index.php?rest_route=\/wp\/v2\/posts\/41369\/revisions"}],"wp:attachment":[{"href":"https:\/\/ipp-news.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=41369"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ipp-news.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=41369"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ipp-news.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=41369"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}