The external debt of the Middle East, North Africa, Afghanistan and Pakistan (MENAP) region increased by 5.8% year-on-year to $598 billion in 2025, marking a substantial rise in the region’s overall borrowing over the past decade, according to the World Bank Group’s International Debt Report 2026. The report shows that the region’s external debt has increased approximately 80% from the $332 billion recorded in 2015, reflecting continued reliance on external financing across its economies. The assessment covers 13 countries with a combined population of 741 million and gross national income (GNI) of $2.04 trillion. Pakistan is included in the regional assessment, with its own external debt reported at $135.1 billion, highlighting the country’s position within the broader regional debt landscape.
The region recorded the largest single-year increase in its external debt-to-GNI ratio among all global regions, with the indicator rising to 29.4% in 2025 from 26.7% in 2024. This increase reflects the continued accumulation of external debt relative to the overall income generated by the region’s economies. However, the report also identified an improvement in debt servicing indicators during the same period. The region’s debt service-to-GNI ratio declined by 0.4 percentage points to 3.1% in 2025, suggesting that debt servicing requirements relative to national income eased despite the expansion in outstanding external liabilities. The contrasting movements indicate that although the overall debt burden increased, the region experienced some improvement in its ability to manage scheduled external debt payments relative to its income.
The composition of the region’s $598 billion external debt shows that public and publicly guaranteed borrowing accounted for the largest share, reaching $425 billion in 2025. Private non-guaranteed external debt stood at $51 billion, while short-term debt amounted to $122 billion. The breakdown highlights the significant role of government-related borrowing in the region’s external financial obligations, while also showing the contribution of private sector and short-term financing. Within public and publicly guaranteed debt, multilateral creditors held the largest portion at $186 billion, followed by private creditors with $126 billion and bilateral creditors with $114 billion. These figures demonstrate the importance of international financial institutions, commercial lenders and government-to-government financing arrangements in meeting the region’s external funding requirements.
Among multilateral creditors, World Bank-International Bank for Reconstruction and Development (IBRD) accounted for $42 billion, while International Monetary Fund Special Drawing Rights (IMF-SDR) allocations stood at $30 billion. Other multilateral creditors collectively accounted for $114 billion. On the bilateral financing side, China was owed $30 billion, while Saudi Arabia accounted for $15 billion. Other bilateral creditors held the remaining $69 billion. The distribution illustrates the diverse sources of external financing available to countries across the MENAP region, with multilateral institutions representing the largest creditor category within public and publicly guaranteed debt. The figures also underline the financial relationships maintained with major bilateral partners, including China and Saudi Arabia, alongside borrowing from international development institutions and private financial markets.
The World Bank report further showed that the region’s external debt represented 107% of exports in 2025, while debt service accounted for 11% of exports. The terms of new external financing also differed considerably between official and private creditors. Official creditors extended new funds at an average maturity of 20 years, with a four-year grace period and an average interest rate of 3.3%. In comparison, private creditors provided financing at an average maturity of five years, with a five-year grace period and an interest rate of 6.9%. The difference in borrowing costs highlights the relatively more expensive terms associated with private external financing, while longer maturities from official creditors provide governments with a comparatively extended repayment period. These financing conditions are important for countries managing external obligations, particularly where fiscal pressures and development requirements create continued demand for international funding.
The report’s findings place the MENAP region among the areas experiencing significant growth in external debt relative to national income. Although the improvement in debt servicing indicators provides some relief, the increase in the debt-to-GNI ratio highlights the continued accumulation of external financial obligations. Pakistan’s inclusion, with external debt of $135.1 billion, makes the regional assessment particularly relevant to its own external financing position and debt management challenges. The World Bank’s findings provide an overview of the region’s creditor structure, borrowing costs and repayment obligations, offering insight into the financial pressures facing governments as they balance external financing requirements with economic stability and development priorities.
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