Pakistan’s total public debt has reached Rs80.52 trillion including USD 91.8 billion of external debt, indicating a substantial increase, worsening debt-to-GDP ratio.
External debt rose 6% year-on-year to $91.8 billion by end-June 2025, an increase of $5 billion. However, in the first quarter of FY2026, it edged down by 0.4% ($0.35 billion) to $91.4 billion.
According to the Debt Policy Statement (January 2026) tabled in the National Assembly on Monday, much of the increase in external debt came from multilateral development partners, including the IMF, with inflows rising 8.7%, nearly $4 billion.
The Ministry of Finance reported in its fiscal and debt policy statements that total public debt climbed from Rs71.25 trillion in June 2024 to Rs80.52 trillion in June 2025, largely driven by higher interest payments. On a per capita basis, debt rose from Rs294,098 in FY24 to Rs333,041 in FY25.
Domestic debt increased by Rs7,312 billion to reach Rs54,472 billion by June 2025, marking a 16% year-on-year rise, lower than the 22% growth recorded during the same period of the previous fiscal year.
The ministry said that under the Fiscal Responsibility and Debt Limitation Act (FRDLA) 2005, the debt-to-GDP ratio was to be reduced to 60% by 2017-18, with annual reductions of 0.5 percentage points until 2022-23 and 0.75 percentage points thereafter until 2032-33, ultimately bringing it down to 50% and maintaining it at or below that level.
However, it acknowledged that total public debt has continued to rise in both absolute terms and as a share of GDP.
