# Pakistan’s Debt and Liabilities Near Rs100tr as Burden Reaches 78.5% of GDP
**ISLAMABAD:** Pakistan’s total debt and liabilities climbed to nearly **Rs100 trillion by June 2026**, with the country spending around **Rs12 trillion on debt servicing** during fiscal year 2025-26, according to the latest data released by the State Bank of Pakistan (SBP).
The central bank reported that total debt and liabilities rose to **Rs99.6 trillion** during FY2025-26, an increase of **Rs5.2 trillion, or 5.5%**, over the previous year. Public debt accounted for around **87%** of the total.
Despite the increase in absolute terms, the debt burden showed some improvement relative to the size of the economy. Total debt and liabilities declined to **78.5% of GDP**, down 4.2 percentage points from a year earlier.
However, the debt-to-GDP ratio remains high for a developing economy such as Pakistan, where limited fiscal resources continue to constrain the government’s ability to service a substantial debt burden.
The SBP said total debt, excluding liabilities, reached **Rs97.9 trillion** by the end of FY2025-26, representing an increase of **Rs6.3 trillion** during the year.
Pakistan’s obligations to the **International Monetary Fund (IMF)** also increased by around **17% to Rs3.1 trillion**. The IMF has disbursed two tranches totalling approximately **$2.2 billion** under the three-year Extended Fund Facility, while another **$450 million** has been released under the climate-support programme.
### Debt Servicing Falls on Lower Interest Rates
Pakistan spent approximately **Rs12 trillion** on servicing its debt and liabilities during FY2025-26, equivalent to around **$43 billion**.
Although the amount remained substantial, debt-servicing costs were **Rs1.2 trillion, or 9%, lower** than the previous fiscal year, primarily due to declining interest rates.
Data showed that Pakistan repaid around **Rs4.5 trillion in principal debt by raising fresh borrowing**, reflecting a 29% increase compared with the previous year.
However, interest expenses declined sharply from **Rs9.5 trillion to Rs7.3 trillion**, a reduction of nearly one-fourth. Debt servicing remains the single largest expenditure item in the federal budget, with the government projecting around **Rs8 trillion** for the current fiscal year.
### Public Debt Rises but Ratio Improves
Gross public debt, which represents the liabilities of the federal government, increased to **Rs86.7 trillion**, up Rs6.2 trillion or 7.7% during FY2025-26.
Despite the increase in nominal debt, gross public debt as a percentage of GDP declined from **70.6% to 68.3%**, reflecting stronger economic growth and fiscal consolidation.
Pakistan also recorded its **third consecutive primary budget surplus** under the IMF programme. The primary balance excludes interest payments and is considered an important indicator of the government’s ability to control debt accumulation.
The surplus was largely supported by higher tax revenues and fiscal tightening, including reductions in subsidies.
The continued primary surplus helped contain the growth in public debt. Without these surpluses, the country’s overall debt burden and debt-to-GDP ratio could have been considerably higher.
### External Debt Reaches $138.6bn
In dollar terms, Pakistan’s **external debt and liabilities increased to $138.6 billion**, up $3.3 billion from the previous fiscal year.
The pace of external debt growth remained significantly lower than in previous years, partly because of limited availability of foreign financing and the SBP’s increased reliance on purchasing foreign currency from the domestic market.
SBP Governor **Jameel Ahmad** said last month that the central bank had cumulatively purchased around **$28 billion** from the local market, including approximately **$9 billion during FY2025-26**.
### US Raises Concerns Over Fiscal Transparency
Meanwhile, a US State Department report on budget transparency raised concerns over the limited public disclosure of Pakistan’s debt obligations, particularly liabilities associated with major state-owned enterprises.
The report noted that publicly available budget documents provided a substantially complete picture of most planned government revenues and expenditures, including natural-resource revenues.
However, it said military and intelligence budgets were not subject to adequate parliamentary or civilian public oversight.
The report also noted that Pakistan made its enacted budget and end-of-year report widely accessible, including online, but did not publish its executive budget proposal within a reasonable timeframe.
The US State Department recommended that Pakistan improve fiscal transparency by making executive budget proposals publicly available on time, disclosing detailed information on government debt obligations—including those of state-owned enterprises—and strengthening parliamentary or civilian oversight of military and intelligence budgets.
Despite the improvement in debt ratios and lower interest costs, the near-Rs100 trillion debt burden highlights the continuing fiscal challenges facing Pakistan and the need for sustained reforms to reduce reliance on borrowing.
