Pakistan among top 10 nations with biggest foreign debt, suggests World Bank report
By Team Newsable | First Published Oct 12, 2021, 9:17 PM ISTThe combined external debt stock of the ten largest DSSI-eligible borrowers (Angola, Bangladesh, Ethiopia, Ghana, Kenya, Mongolia, Nigeria, Pakistan, Uzbekistan, and Zambia) was 509 billion dollars.
Pakistan is among the top ten nations with the biggest foreign debt holdings and became eligible for the Debt Service Suspension Initiative (DSSI) after the COVID-19 outbreak, according to a World Bank assessment. According to The News International, using the World Bank's International Debt Statistics in 2022, there was a considerable disparity in the rate at which external debt accrued in each DSSI-eligible nation, including the group's top borrowers.
The combined external debt stock of the ten largest DSSI-eligible borrowers (Angola, Bangladesh, Ethiopia, Ghana, Kenya, Mongolia, Nigeria, Pakistan, Uzbekistan, and Zambia) was 509 billion dollars at end-2020, 12% higher than the comparable figure at end-2019 and equivalent to 59% of the external debt obligations of all DSSI-eligible countries combined.
They also accounted for 65% of DSSI-eligible nations' end-of-2020 private non-guaranteed external debt. Individual countries' debt accumulation rates vary greatly.
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According to the World Bank study, the 8 per cent growth in Pakistan's foreign debt holdings represented the influx of budgetary support from official bilateral and multilateral creditors and rollover and new credit lines from commercial banks, according to The News International. Net inflows from other private creditors increased by 15 per cent in 2020 to 14 billion dollars but were highly concentrated and reflected rollovers and fresh credit extensions by commercial bank loans to Pakistan in the context of the IMF programme.
FDI inflows to Pakistan decreased somewhat to 1.9 billion dollars, a 5% decrease from the previous year, aided by sustained investment from British and Chinese companies in power generating and the communications industry. According to The News International, South Asia's debt to China has increased from 4.7 billion dollars in 2011 to 36.3 billion dollars in 2020.
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