Key Takeaways
- Pakistan’s public debt surged to $286.8 billion in FY 2025, a 13% annual increase
- Debt-to-GDP ratio rose to 70% despite fiscal consolidation efforts
- Domestic debt grew 15% while external debt increased 6%
Pakistan’s total public debt reached $286.8 billion (PKR 80.6 trillion) by June 2025, marking a significant 13% increase from the previous fiscal year, according to official data released by the Ministry of Finance.
Debt Composition and Key Metrics
The Annual Debt Review for FY 2025 revealed that domestic debt stood at PKR 54.5 trillion while external debt reached PKR 26.0 trillion. The debt-to-GDP ratio climbed to 70% in June 2025, up from 68% a year earlier.
“This was mostly due to lower-than expected growth in the nominal GDP in FY-2025, as significantly lower inflation reduced the pace of economic expansion, thereby pushing up the debt-to-GDP ratio despite fiscal consolidation efforts,” the report stated.
Domestic and External Debt Trends
Domestic debt increased by 15% year-on-year, reaching PKR 54.5 trillion – the lowest annual increase in three fiscal years. External debt grew by 6% to $91.8 billion, driven by IMF disbursements, a $1 billion ADB-guaranteed commercial loan, and inflows from other multilateral institutions.
Provincial Debt Distribution
The Federal Government holds 84% of Pakistan’s external public debt, while provinces and sub-national entities account for 16%. Among provinces:
- Punjab: $6.18 billion (7%) – largest borrower
- Sindh: $4.67 billion (5%) – sharpest annual increase
- Khyber Pakhtunkhwa: $2.77 billion (3%)
- Baluchistan: $371 million
- Pakistan occupied Kashmir: $281 million
