Pakistan’s total public debt has climbed to a record Rs81,949 billion, raising fresh concerns over the country’s fiscal stability and debt management. Official figures show the government’s debt increased sharply over the past year, adding further pressure to an economy already facing high repayment obligations and rising interest costs.
According to the latest data, Pakistan’s total debt increased by Rs5,904 billion during the past year. The debt stock rose from Rs76,045 billion in May last year to Rs81,949 billion, reflecting a significant increase in both domestic and external borrowing. The report states that the Ministry of Finance has been unable to curb the rapid rise in government debt.
Domestic debt recorded the largest increase during the period. Official statistics show that local debt grew by Rs4,647 billion, rising from Rs53,460 billion to Rs58,107 billion in one year. The sharp increase has added to the government’s financial obligations and placed additional strain on Pakistan’s fiscal position.
External debt also continued to rise during the same period. According to the report, Pakistan’s foreign debt increased by Rs1,257 billion, contributing to the country’s overall debt burden. The report also highlighted a sharp rise in short-term external debt, which surged by Rs2,491 billion during the last fiscal year to exceed Rs2,692 billion, compared to Rs201 billion in June 2025.
The government is expected to pay Rs8,054 billion in debt servicing during the current fiscal year. Economists believe this substantial interest payment will consume a significant portion of government revenues, leaving limited fiscal space for development projects, social welfare programs, and other public sector spending.
The Auditor General of Pakistan (AGP) has also expressed concerns over debt management practices, raising questions about the handling of public borrowing amid increasing repayment obligations. The report underscores the need for stronger fiscal discipline and effective debt management strategies as Pakistan continues to face mounting economic challenges.
Also read: Pakistan Repays $1.3 Billion Debt, Reserves to Top $18bn
