Pakistan's debt swells 75 pc to Rs 83.6 trillion in four years
New Delhi, Aug 13
Pakistan's federal government debt has surged by 75 per cent over the past four years despite a sharp rise in revenues and repeated fiscal tightening measures under International Monetary Fund-backed programmes, a report has said.
A report by The Express Tribune -- citing the State Bank of Pakistan (SBP) -- said the federal government's debt, excluding IMF borrowings and certain other liabilities held on the central bank's balance sheet, rose to Rs 83.6 trillion by the end of June 2026.
It further showed that the debt stock increased by Rs 35.8 trillion (Pakistani rupee) compared with June 2022, when the Pakistan Democratic Movement-led government presented its first budget after assuming power.
Moreover, federal debt grew by Rs 5.8 trillion or 7.3 per cent during the last fiscal year alone.
The sharp increase has occurred despite a 107 per cent jump in the federal government's gross revenues over the four-year period.
However, rising debt-servicing costs, continued fiscal deficits and elevated government expenditure have eroded the benefits of stronger revenues, the report said.
Interest payments alone consume between 42 per cent and 50 per cent of the annual budget, leaving limited fiscal space for development and productive sectors of the economy, it said.
For the current fiscal year, more than Rs 8 trillion has been allocated for debt servicing, while another Rs 8.8 trillion is earmarked for transfers to provinces under the National Finance Commission arrangement.
In addition, domestic debt rose 9.1 per cent year-on-year to Rs 59.5 trillion in June this year, while external debt increased to Rs 24.2 trillion.
The growing reliance on debt and persistently high financing needs have intensified concerns over Pakistan's long-term fiscal and debt sustainability, the report added.
— IANS
Reader Comments
The numbers are staggering - Rs 83.6 trillion in just four years! And despite 107% revenue growth, they're still drowning. It's a classic case of spending beyond means. Their economic policies seem designed to fail, not to uplift the common citizen.
Sad to see a neighbouring country in such distress. But let's be honest - the IMF programmes haven't helped Pakistan's common man at all. The money goes to servicing debt while education, health and infrastructure suffer. This is not sustainable for anyone in the region. 😔
Interesting how the Pakistani rupee is depreciating so fast that debt figures look even scarier in local currency terms. With 42-50% of budget going to interest payments, there's no room for development. The IMF needs to push for real structural reforms, not just fiscal tightening.
A 75% debt increase in four years despite revenue growth - that's almost impossible to do unless you're actively trying to bankrupt yourself. The provincial transfers alone are Rs 8.8 trillion! They need to rethink their federal-provincial fiscal relationship urgently.
It's concerning for South Asia's stability when one of the largest economies in the region is this deep in debt. Pakistan needs to diversify its economy, reduce reliance on imports, and cut military spending that is disproportionate to its civilian needs.
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