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Pakistan Debt Crisis: Liabilities Surge to Rs 85 Trillion, Economy Under Severe Strain

Pakistan's total debt and liabilities have surged to Rs 85 trillion, a 55% increase from Rs 55 trillion four years ago. The debt accumulation outpaces economic growth, raising concerns over fiscal sustainability. The power sector's circular debt has also risen sharply to Rs 3.2 trillion, reflecting persistent inefficiencies. State-owned enterprises remain a major burden, with over 110 entities incurring annual losses of up to Rs 1 trillion.

Key Points: Pakistan Debt Hits Rs 85 Trillion, Economy Under Severe Strain

  • Debt and liabilities rise from Rs 55 trillion to Rs 85 trillion in four years
  • Average annual increase of Rs 7.5 trillion
  • Power sector circular debt up 45% to Rs 3.2 trillion
  • Over 110 state-owned enterprises carry liabilities exceeding Rs 30 trillion
2 min read

Pakistan economy under strain as debt and liabilities spiral to Rs 85 trillion: Report

Pakistan's total debt and liabilities have surged to Rs 85 trillion, a 55% jump in four years, raising concerns over fiscal sustainability amid limited reforms.

"The expansion in debt has not been matched by corresponding growth in productive assets or economic output - The News Pakistan"

New Delhi, May 5

Pakistan's economy is under mounting pressure as its total debt and liabilities have surged to Rs 85 trillion over the past four years, which highlights a steep rise in fiscal stress amid limited structural reform, a report has said.

A report in The News Pakistan highlighted that the country's debt and liabilities have increased from around Rs 55 trillion four years ago to Rs 85 trillion at present -- an overall jump of nearly 55 per cent.

This translates into an average annual increase of about Rs 7.5 trillion, highlighting the scale of continuous borrowing, it said.

On a monthly basis, liabilities have reportedly risen by around Rs 625 billion, while on a daily basis, the accumulation stands at nearly Rs 20 billion.

The report noted that this persistent rise underscores the pace at which fiscal obligations are building up in the economy.

Moreover, the expansion in debt has not been matched by corresponding growth in productive assets or economic output that raised concerns over the sustainability of public finances.

The report highlighted that in the absence of meaningful reforms, debt accumulation continues to outpace economic efficiency gains, adding pressure on fiscal stability.

Moreover, a similar trend is visible in the power sector, where circular debt has increased from Rs 2.2 trillion to Rs 3.2 trillion, an increase of around 45 per cent in four years.

This suggested annual additions of about Rs 250 billion, with persistent inefficiencies, weak recoveries and continued losses.

State-owned enterprises (SOEs) also remain a significant burden, with more than 110 entities carrying liabilities exceeding Rs 30 trillion. These enterprises collectively incur losses of Rs 800 billion to Rs 1 trillion annually.

In addition, on governance and expenditure, Pakistan's federal and provincial governments operate a fleet of around 85,500 vehicles, compared to just 86 used by the UK government.

Annual fuel expenditure stood at approximately Rs 114 billion or about Rs 9.5 billion per month, according to the report.

- IANS

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Reader Comments

P
Priya S
The comparison of government vehicle fleets is shocking: 85,500 in Pakistan vs. 86 in the UK. That's not just financial mismanagement—it's a culture of wastage. Indian governments should also take note and audit unnecessary expenses.
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James A
As someone who follows South Asian economics, this Rs 85 trillion figure is staggering. Without IMF-style reforms and real revenue generation, Pakistan's debt-to-GDP ratio will only worsen. India must keep learning from such crises to avoid complacency.
K
Kiran H
Circular debt in the power sector is a familiar story even in some Indian states. But Rs 3.2 trillion just for that sector? Incredible. And those SOEs losing up to Rs 1 trillion annually—this is a systemic failure. 😞
S
Suresh O
A daily debt addition of nearly Rs 20 billion? That's like pouring water into a bucket with no bottom. Pakistan needs to seriously rethink its economic model—cut subsidies, improve tax collection, and reduce the size of government. Bharat must stay vigilant.
A
Amanda J
The human cost of this is often overlooked: inflation, unemployment, and reduced public services. Neighbors struggling don't mean we celebrate—it means we should extend empathy while securing our own economy. Let's hope for sensible policies across the border.
A
Arjun K
Respect

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