The federal government’s gross debt crossed Rs6 trillion in the first ten months of the current fiscal year (2024–25), a result of heavy borrowing to cover the budget deficit.
According to a report released by the State Bank of Pakistan on Wednesday, the federal government’s gross debt increased by 9 percent during July–April of the fiscal year 2024–25. At the end of April 2025, the federal government’s gross debt, which includes both domestic and foreign debt, rose to a record high of Rs74.936 trillion, up from Rs68.914 trillion in June 2024. Thus, the debt increased by Rs6.022 trillion in just ten months.
The main reason for the increase in debt was the rapid rise in domestic debt, which grew by 11.37 percent or Rs5.363 trillion to Rs52.523 trillion in April 2025, compared to Rs47.16 trillion in June 2024. Domestic debt includes long-term debt of Rs44.132 trillion and short-term debt of Rs8.328 trillion.
Foreign debt also increased by Rs659 billion in rupee terms in the ten months of the current fiscal year. At the end of April 2025, foreign debt stood at Rs22.413 trillion, compared to Rs21.754 trillion in June 2024. According to the State Bank, the average exchange rate of the dollar in June 2024 was Rs278.3668, which reached Rs280.9739 in April 2025.
In just one month, during April 2025, the government’s debt increased by Rs1.248 trillion, mainly due to massive borrowing to meet the budget deficit. On a monthly basis, the government’s debt increased from Rs73.688 trillion in March 2025 to Rs74.936 trillion in April 2025, an increase of 2 percent.
According to experts, although tax collections by the Federal Board of Revenue (FBR) increased by 26 percent during July–May 2024–25 compared to the previous fiscal year, overall the FBR has failed to achieve its target. This shortfall in revenue has forced the government to borrow more from internal and external sources.
The FBR was able to collect Rs10.233 trillion in revenue in the eleven months of July–May, while the budget target for the same period was Rs11.241 trillion. Thus, there was a shortfall of about Rs1 trillion in revenue.
The State Bank has already emphasized that a rapid increase in tax revenue is necessary to achieve the annual fiscal targets. Achieving the primary balance target still remains a major challenge for the government.
