Level of External Vulnerability The level of external debt to the GNI has increased from 36 percent in 2010 to 40 percent in 2022. The most severe deterioration is in indicators linked to exports, because of their limited growth. The level of external debt to exports has risen sharply from 220 percent in 2010 to over 400 percent in 2022. Similarly, the debt service to exports has gone up from 15 percent to 37 percent. The relative position of Pakistan in the level of external vulnerability and South Asian countries as a group is highlighted in Table 9.3. Table 9.3: Magnitude of External Vulnerability Indicators of Pakistan and the South Asian Region – 2021 (%) South Asia Pakistan Pakistan is clearly placed in a very difficult position as compared to • External Debt to Exports(%) 117 360 other South Asian • External Debt to GNI(%) 22 38 countries like India • Debt Service to Exports(%) 9 34 and Bangladesh. • Short-Term Debt Share(%) 17 • Reserves to External Debt 74 Source: World Bank 7 For example, the 15 reserves to external debt ratio is as high as 74 percent for the latter group of countries while it is only 15 percent in the case of Pakistan in 2021. Another country in a very difficult situation is Sri Lanka, which has gone to the extent of defaulting in April 2022. 9.2 External Vulnerability Index of Countries The objective here is to compare Pakistan with other countries which are also considered as externally vulnerable. These are countries which have population above 20 million and have been included in the Countries with the Highest Risk of Default prepared by the Visual Capitalist . Pakistan is ranked fourth in this list of 25 countries in term of the level of probability of default. The list of relatively large countries is given in Table 9.4. The list includes 11 relatively large countries. Two countries, viz., Sri Lanka and Ghana, have already defaulted. The combined population of these 11 countries is over 1 billion. It includes two countries, Argentina, and Ecuador from Latin America; Egypt, Ghana, Kenya, Ethiopia, and Nigeria from Africa; Pakistan and Sri Lanka from Asia and Türkiye and Ukraine from Europe. 97