Islamabad: Pakistan’s economic woes have hit a new low, with the country’s total public debt ballooning to a staggering Rs 80.6 lakh crore (approximately $286.832 billion) by June 2025, official figures from the Finance Ministry reveal.
This marks a sharp 13 per cent jump from the previous fiscal year, underscoring the fragility of an economy already teetering on the brink.
Breaking down the numbers, domestic debt accounts for the lion’s share at Rs 54.5 lakh crore, up 15 per cent year-on-year, while external borrowings stand at Rs 26 lakh crore — highlighting Islamabad’s perilous reliance on foreign lenders.
The ministry’s Annual Debt Review Report for FY 2024-25, released in September, pins the blame on sluggish GDP growth and a sharp dip in inflation that has stifled economic activity and revenue collection.
Despite the government’s frantic measures — tax reforms, spending cuts, and subsidy trims — these efforts have fallen short against tepid growth. The debt-to-GDP ratio has spiked alarmingly, raising red flags for fiscal sustainability.
“Without accelerating GDP to 5-6 per cent, this burden could become untenable,” warns an economic analyst, urging a push for exports, foreign investment, and industrial revival.
Compounding the crisis, Pakistan remains entangled in an IMF bailout programme, where mounting debts threaten not just stability but essential social services. On a positive note, the State Bank of Pakistan reported a weekly increase of $14 million, bringing the central bank’s holdings to $14.46 billion as of October 17. Commercial banks hold $5.40 billion, for a total of $19.85 billion — barely enough to cover imports for a couple of months.
As the nation grapples with this debt deluge, the path to recovery looks steeper than ever, testing the resolve of policymakers amid global headwinds.