The State Bank of Pakistan (SBP) has released a detailed report highlighting the country’s growing debt burden, raising concerns about increasing financial pressure on the national economy. According to the report, Pakistan’s total financial liabilities including loans, interest payments, and government guarantees have reached Rs. 80,681 billion.
The data shows a mixed trend in Pakistan’s debt structure. While external debt recorded a slight decline on a monthly basis, domestic debt increased sharply over the past year. The rise in internal borrowing indicates a growing reliance on local sources to meet financing needs.
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According to the SBP report, internal loans increased by 12.7 percent, reaching Rs. 54,619 billion. This significant growth reflects the government’s increased borrowing from domestic banks and financial institutions. As a result, overall government debt rose by more than 10 percent on a year-on-year basis.
The report also highlighted the rising cost of debt servicing. Interest payments on government loans crossed Rs. 1,474 billion, placing additional strain on public finances. Economists warn that high interest obligations reduce fiscal space, limiting the government’s ability to spend on development, social services, and economic growth.
Experts say the increasing domestic debt burden may lead to higher inflation and reduced private-sector lending, as government borrowing absorbs a large share of available credit. Although a slight decline in external debt offers some relief, analysts stress that long-term fiscal discipline and economic reforms are needed to manage the overall debt situation.
The State Bank emphasized the importance of controlling borrowing, improving revenue collection, and promoting sustainable economic growth to ease financial pressures. The report serves as a reminder of the challenges facing Pakistan’s economy and the need for careful debt management.
Overall, the findings underline the urgency of addressing rising debt levels to ensure economic stability and long-term financial sustainability.
