ISLAMABAD: Pakistan’s debt burden has reached alarming levels, with every citizen now owing Rs318,252, according to fresh estimates released by the Economic Policy & Business Development (EPBD) Think Tank.
The figures reveal a sharp rise over the past decade — per capita debt has surged from Rs90,047 in 2014 to Rs318,252 in 2024, reflecting an average annual increase of 13 percent.
Pakistan’s public debt-to-GDP ratio currently stands at 70.2 percent, far exceeding the legal ceiling of 60 percent set under the Fiscal Responsibility and Debt Limitation Act, 2005. In regional terms, the country trails only Sri Lanka (96.8 percent) and fares worse than Thailand (61.1 percent), India (57.1 percent), Indonesia (40.2 percent), and Bangladesh (36.4 percent).
The EPBD report flagged several warning signs: a 71 percent rupee devaluation since 2020, record-high interest rates of 22 percent in FY2023-24, and repeated breaches of debt sustainability thresholds. It warned that Pakistan has been caught in a “debt trap,” where high interest rates weaken the currency, further inflating debt obligations and perpetuating a vicious cycle.
To avert a full-blown crisis, the Think Tank stressed the need for urgent fiscal reforms, structural measures to boost exports, and comprehensive debt restructuring to restore economic stability.
Story by Tahir Amin
