Pakistan’s national income is increasingly being consumed by interest payments on loans, as the country faces a steep rise in its annual debt servicing burden over the next five years.
According to official documents, Pakistan is expected to pay more than Rs45,000 billion in interest on loans during the next five years, an amount equal to nearly two and a half years of total government income.
The country’s economy has come under growing pressure as the interest bill on loans continues to rise each year.
The documents show that the burden is becoming more difficult to manage with every passing year, limiting fiscal space for development, public services and economic relief.
Interest bill to cross Rs45,000bn
Pakistan will pay Rs45,000 billion not in principal debt repayment, but only in interest on loans over the next five years.
According to the documents, if the government collected all its revenue for two and a half years without spending a single rupee on any other purpose, it would only then be able to cover this interest payment bill.
Public to bear cost through taxes
The interest payments will be made through tax and non-tax revenue collected from the public.
The documents also indicate that part of the burden may be financed through additional borrowing, further adding pressure to the national economy.
The interest payment bill for 2026-27 is estimated at Rs7,824 billion. In 2027-28, the annual interest burden is projected to increase to Rs8,273 billion, while in 2028-29 Pakistan is expected to pay Rs8,681 billion in interest on loans.
The bill is forecast to climb further to Rs9,365 billion in 2029-30. By 2030-31, Pakistan’s annual interest payments are likely to hit a record Rs10,322 billion.
External debt exceeds $104bn
The documents further reveal that Pakistan’s external debts and liabilities have crossed $104 billion. Out of this amount, the direct external debt owed by the central government is more than $82 billion.
By March 2026, Pakistan’s total debt in rupee terms had exceeded Rs97,000 billion.
The rising debt stock and growing interest payments have intensified concerns that borrowing, once used as a financial remedy, has now become a major burden on the economy.
Rising interest costs limit fiscal choices
The growing interest burden means a large share of national income will continue to be diverted toward debt servicing.
With interest payments eating into public finances, the government will face increasing challenges in funding development projects, social support, infrastructure and relief measures without raising more revenue or taking fresh loans.
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