Pakistan debt spirals to Rs 85 trillion in four years: Report
Synopsis
Pakistan's debt and liabilities have ballooned to Rs 85 trillion — a 55% surge in just four years — with no corresponding growth in productive assets. Circular debt, loss-making state enterprises, and a government vehicle fleet of 85,500 units paint a picture of a fiscal system straining under its own weight.
Key Takeaways
Pakistan's total debt and liabilities have risen from Rs 55 trillion to Rs 85 trillion in four years — a 55% increase.
Average annual debt addition stands at approximately Rs 7.5 trillion , or nearly Rs 20 billion per day.
Power sector circular debt has grown from Rs 2.2 trillion to Rs 3.2 trillion , up 45% in four years.
More than 110 state-owned enterprises carry liabilities exceeding Rs 30 trillion and post annual losses of Rs 800 billion to Rs 1 trillion .
Pakistan's governments operate 85,500 vehicles , with annual fuel costs of approximately Rs 114 billion , compared to just 86 vehicles used by the UK government.
Pakistan's economy is under severe fiscal strain as its total debt and liabilities have surged to Rs 85 trillion, up from approximately Rs 55 trillion four years ago — a jump of nearly 55 per cent, according to a report published by The News Pakistan. The sharp rise underscores deepening fiscal stress amid limited structural reform in the country.
Scale of Debt Accumulation
The increase translates into an average annual addition of approximately Rs 7.5 trillion, according to the report. On a monthly basis, liabilities have reportedly risen by around Rs 625 billion, while on a daily basis, the accumulation stands at nearly Rs 20 billion.
The report noted that this persistent rise highlights the pace at which fiscal obligations are building up, with debt accumulation continuing to outpace economic efficiency gains in the absence of meaningful reforms.
Debt Not Matched by Productive Growth
Critically, the expansion in debt has not been matched by corresponding growth in productive assets or economic output, raising concerns over the long-term sustainability of Pakistan's public finances. Analysts and the report both flag that without structural course correction, the trajectory of borrowing poses a significant risk to fiscal stability.
Power Sector and Circular Debt
A similar pattern of accumulation is visible in Pakistan's power sector, where circular debt has risen from Rs 2.2 trillion to Rs 3.2 trillion — an increase of approximately 45 per cent over four years. This suggests annual additions of around Rs 250 billion, driven by persistent inefficiencies, weak recovery rates, and continued losses across the sector.
State-Owned Enterprises Remain a Heavy Burden
Pakistan's state-owned enterprises (SOEs) present another layer of fiscal concern. More than 110 SOEs collectively carry liabilities exceeding Rs 30 trillion and incur annual losses estimated between Rs 800 billion and Rs 1 trillion, according to the report.
Governance and Expenditure Concerns
On the governance front, Pakistan's federal and provincial governments together operate a fleet of approximately 85,500 vehicles — a figure the report contrasts sharply with just 86 vehicles used by the UK government. Annual fuel expenditure for this fleet stands at approximately Rs 114 billion, or about Rs 9.5 billion per month, according to the report. This comparison has drawn attention to the scale of administrative overhead that critics argue diverts resources away from productive public spending.
With debt obligations continuing to mount and structural reforms yet to materialise at scale, Pakistan's fiscal outlook remains under close scrutiny from both domestic observers and international creditors.
Point of View
But the more alarming detail is what the debt has not produced — there is no corresponding rise in productive assets or GDP growth to justify the borrowing trajectory. Pakistan's pattern of accumulating obligations through SOE losses, circular debt, and administrative excess while deferring structural reform is not new, but the pace has accelerated. The vehicle fleet comparison with the UK is a blunt illustration of governance inefficiency, but the deeper problem is institutional: without SOE privatisation, energy sector reform, and credible fiscal consolidation, each IMF tranche buys time rather than transformation.
NationPress
9 Aug 2026
Frequently Asked Questions
How much has Pakistan's total debt and liabilities risen in four years?
Pakistan's total debt and liabilities have surged from approximately Rs 55 trillion to Rs 85 trillion over the past four years, a rise of nearly 55%, according to a report by The News Pakistan. This translates to an average annual increase of about Rs 7.5 trillion.
What is Pakistan's circular debt situation in the power sector?
Circular debt in Pakistan's power sector has risen from Rs 2.2 trillion to Rs 3.2 trillion — an increase of around 45% in four years. The report attributes this to persistent inefficiencies, weak recovery rates, and continued losses in the sector.
How much do Pakistan's state-owned enterprises lose annually?
More than 110 state-owned enterprises in Pakistan collectively carry liabilities exceeding Rs 30 trillion and incur annual losses of between Rs 800 billion and Rs 1 trillion, according to the report.
Why is Pakistan's government vehicle fleet a concern?
Pakistan's federal and provincial governments operate approximately 85,500 vehicles, incurring annual fuel costs of around Rs 114 billion. The report contrasts this with just 86 vehicles used by the UK government, highlighting the scale of administrative expenditure.
What does the debt surge mean for Pakistan's fiscal outlook?
The report warns that debt accumulation is outpacing economic efficiency gains, with no corresponding growth in productive assets. In the absence of meaningful structural reforms, Pakistan's public finances face increasing sustainability concerns.
