China is Pakistan’s Biggest Financier With Almost $29 Billion in Loans in 2023

The World Bank (WB) has estimated Pakistan’s total external debt stocks at $130.847 billion by end-2023 compared to $127.708 billion by end-2022. China provided loans of almost $29 billion by end-2023. The World Bank in its latest report, “International Debt Report 2024, noted that the South Asia region saw the biggest yearly increase in interest payments on public and publicly guaranteed (PPG) debt in 2023, rising 62 percent to $12.5 billion. The increase was most noticeable in Bangladesh and India, whose interest payments increased by more than 90 percent in 2023; Pakistan made the second-largest interest payments in the region. For IDA-eligible countries, interest payments on total debt stock have tripled since 2013 to an all-time high of $34.6 billion in 2023. Interest payments as a share of export earnings, a measure of the repayment capacity of a country, significantly increased by 1.6 percentage points in 2023 to 5.8 percent, equivalent to an increase last recorded in 2005. Mozambique (38.3 percent), Senegal (25.9 percent), Pakistan (13.6 percent), Kenya (12.8 percent), and Dominica (10.3 percent) had the highest ratios of interest payments on total debt to export earnings, a situation that has weakened their fiscal positions. IMF repurchases for low and middle-income countries (LMICs), excluding Argentina, more than doubled in 2023 to $12.2 billion, with the top repurchases registered from Egypt, Ukraine, and Pakistan. IMF repurchases outpaced the increase in new lending, which rose 12.9 percent to $14.8 billion in 2023, as new IMF lending has stabilized after the extraordinary support provided in 2020 during the aftermath of the COVID-19 pandemic. In terms of volume, India was the top five LMIC recipient of personal remittances in 2023, with US$119.5 billion, followed by Mexico ($66.2 billion), the Philippines ($39.1 billion), China ($29.1 billion), and Pakistan ($26.6 billion). The World Bank report noted that total external debt stocks stood at $130.847 billion by 2023 including the use of IMF credit and SDR allocations of $11.532 billion against $11.522 billion in 2022, long-term external debt of $110.437 billion in 2023 against $107.418 billion in 2022. Public and publicly guaranteed debt, by the creditor and creditor type in 2023, including IMF credit includes 46 percent multilateral, (18 percent World Bank, 15 percent ADB, 13 per other multilateral), 45 percent bilateral (22 percent China, 7 percent Saudi Arabia, 8 percent other bilateral) and 9 percent private (8 percent bondholders, 8 percent multiple lenders). Short-term external debt stood at $8.878 billion in 2023 compared to $8.768 billion in 2022. According to the data, external debt stocks as a percentage of exports were 352.4 percent in 2023 compared to 322.1 percent in 2022, external debt stocks to GNI was 39.3 percent in 2023 compared to 34.6 percent in 2022, debt service as a percentage of exports was 43.1 percent in 2023 compared to 42 percent in 2022, and gross national income (GNI) was 332,603.5 percent in 2023 compared to 369,540.0 percent in 2022. The long-term external debt stocks include; public and publically guaranteed debt of $92.990 billion in 2023 compared to $91.220 billion in 2022. Commercial banks and others stood at $440 million in 2023 compared to $2.096 billion in 2022.