Pakistan’s Public Debt Hits Record Rs80.5 Trillion

September 10, 2025:

Pakistan’s public debt surged to an unprecedented Rs80.5 trillion by the end of FY25, reflecting an addition of Rs25.4 billion daily, according to the State Bank of Pakistan (SBP). This marks a 13% increase (Rs9.3 trillion) compared to last year and breaches the debt limit prescribed under the Fiscal Responsibility and Debt Limitation Act.

The debt-to-GDP ratio rose from 67.8% to 70.2%, well above the legal requirement to gradually reduce the burden toward 50% by FY33. Combined debt and liabilities now stand at Rs94.2 trillion, or 82.1% of GDP, severely constraining fiscal space.

Domestic debt climbed to Rs54.5 trillion, while external debt rose to Rs23.4 trillion, largely from concessional multilateral and bilateral sources. Debt from the IMF alone grew 13% to Rs2.63 trillion, underlining reliance on external support.

The SBP reported that Pakistan spent Rs13.2 trillion on loan repayments and interest servicing last year, with interest costs alone consuming Rs9.5 trillion.

With rising short-term debt exposure and high refinancing risks, the debt profile underscores growing sustainability challenges. Policymakers now face limited fiscal flexibility as half of the national budget is absorbed by debt servicing.