Pakistan’s debt burden has become the defining constraint of its fiscal and economic future. According to data released by the State Bank of Pakistan (SBP), the total government debt (excluding the International Monetary Fund) increased from Rs69 trillion in June 2024 to Rs78tr by June 2025. The public debt (including the IMF debt) increased to Rs80.5tr from Rs71.2tr in June 2024. Both the numbers understate the full level of the government’s indebtedness.

As per the SBP’s June 2025 summary, federal government debt stood at Rs80.5tr — up 13 per cent from the previous year. Yet this headline number understates reality.

Once external deposits, foreign currency swaps, Special Drawing Rights allocations, non-resident rupee deposits, and the debts of public sector enterprises are added — roughly Rs7.6tr in obligations — the figure rises to Rs88tr, or 77pc of GDP. Add to this the accumulated arrears of the power and gas sectors — together approaching Rs5tr — and the effective public debt load climbs to around Rs93tr, about 81pc of GDP.

The speed of this accumulation is striking. In FY25 alone, public debt grew by Rs9.4tr, with domestic borrowing swelling to Rs56.48tr and external debt increasing by $5.2 billion. The government’s external debt and liabilities now hover around $111bn, a stark indicator of reliance on foreign lenders.

Servicing these obligations consumed Rs8.9tr in FY25, over half of total federal revenues, but a staggering 82.7pc of net (after transfers to........

© Dawn Business