Pakistan’s debt burden has climbed to a record high, raising fresh concerns over the government’s debt management. Official figures show total debt has reached Rs81,949 billion after a sharp increase during the past year.
The Ministry of Finance has failed to control the rapid rise in government debt, according to the report.
During the past one year, the government’s debt burden increased by Rs5,904 billion, rising from Rs76,045 billion in May last year to Rs81,949 billion.
The increase has pushed Pakistan’s debt burden to what officials and experts describe as an unbearable level.
Official statistics show that domestic debt saw a record increase of Rs4,647 billion in one year. Local debt rose from Rs53,460 billion to Rs58,107 billion, adding further pressure on the country’s fiscal position.
External debt also increases
External debt also increased during the same period. According to the report, Pakistan’s external debt rose by Rs1,257 billion in one year, adding to the country’s overall debt burden.
Pakistan will also have to pay Rs8,054 billion in interest on debt during the current fiscal year. This huge interest burden is expected to consume a major share of government resources, leaving limited fiscal space for development and public welfare spending.
Short-term external debt jumps
The report also highlights an extraordinary surge in short-term external debt. Short-term external debt increased by Rs2,491 billion in the last fiscal year, rising more than 13 times to exceed Rs2,692 billion.
By June 2025, short-term external debt was limited to Rs201 billion, but within just one year, it saw a massive increase.
AGP raises concerns
The Auditor General of Pakistan has also raised questions over debt mismanagement.
The report points to growing concerns about how debt is being handled at a time when Pakistan is already facing heavy repayment obligations and rising interest costs.
