Pakistan’s domestic debt has reached an unprecedented Rs54,471 billion as of June 2025, marking a staggering increase of more than Rs28,000 billion in the past five years.
Official figures from the Ministry of Finance reveal that the government’s internal debt continues to climb sharply, putting additional strain on the national budget and future fiscal planning.
Debt burden grows year by year
According to the ministry’s document, the country’s domestic debt stood at Rs26,265 billion in June 2021. By June 2025, it had more than doubled, underscoring the growing dependence on internal borrowing to manage fiscal gaps and budgetary shortfalls.
The document highlights a worrying trend — the continuous rise in the debt burden each fiscal year. Despite efforts to control borrowing, the pace of increase shows no signs of slowing down.
Principal and interest payments reach record levels
In June 2025, the principal amount of domestic debt repayments was recorded at Rs25,090 billion, while annual interest payments surged to Rs7,962 billion. This marks an increase of over Rs800 billion in just one year.
For comparison, the annual interest payments were Rs7,164 billion in June 2024, Rs4,936 billion in June 2023, and Rs2,524 billion in June 2021. The consistent rise demonstrates how the country’s debt servicing obligations are expanding much faster than its ability to generate revenue.
