Pakistan’s total public debt increased by Rs5.904 trillion over the past year, reaching Rs81.949 trillion, according to the latest figures released by the State Bank of Pakistan (SBP). The sharp rise highlights the country’s growing fiscal challenges and the increasing burden of debt servicing.
The data shows that domestic debt recorded the largest increase, climbing by Rs4.647 trillion during the year. Meanwhile, external debt rose by Rs1.257 trillion, reflecting continued reliance on foreign borrowing to meet financing requirements. Officials also noted a significant increase in short-term external debt, which has raised concerns about refinancing risks and future repayment obligations.
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The growing debt burden is expected to have a substantial impact on public finances. Pakistan is projected to spend more than Rs8.054 trillion on interest payments during the current fiscal year, consuming a large share of government revenues and limiting the resources available for development projects, education, healthcare, and social welfare programs.
The Auditor General of Pakistan has also expressed concerns over the country’s debt management practices, urging greater transparency and more effective borrowing strategies. The report raises questions about the sustainability of current borrowing trends and their long-term implications for economic stability.
Economists argue that while borrowing is often necessary to finance budget deficits and development initiatives, maintaining debt at sustainable levels is crucial for long-term economic growth. They stress the importance of increasing revenue collection, promoting exports, attracting investment, and implementing fiscal reforms to reduce dependence on debt.
As Pakistan continues to navigate economic challenges, effective debt management and prudent financial planning will remain key priorities for ensuring macroeconomic stability and protecting the country’s long-term financial health.
