Pakistan’s total public debt reached $286.832 billion (PKR 80.6 trillion) as of June 2025, almost 13 per cent higher than the previous year, according to official data released by the ministry of finance in its Annual Debt Review for FY25. Of this, domestic debt stood at PKR 54.5 trillion while external debt was PKR 26.0 trillion, according to news agency PTI.The data showed the debt-to-GDP ratio increased to around 70 per cent in June 2025, up from 68 per cent a year earlier. The report attributed the rise primarily to lower-than-expected nominal GDP growth, with subdued inflation slowing economic expansion despite fiscal consolidation efforts.Domestic debt rose 15 per cent year-on-year—the lowest increase in three fiscal years—while external debt increased by 6 per cent to $91.8 billion. The external debt growth was supported by disbursements from the International Monetary Fund (IMF), an ADB-guarantee-backed commercial loan of $1 billion, and inflows from other multilateral institutions, as per PTI.Provincial debt also increased, with Pakistan’s Punjab as the largest borrower at $6.18 billion (7%), followed by Sindh at $4.67 billion (5%), which recorded the sharpest rise. Khyber Pakhtunkhwa’s debt reached $2.77 billion, Baluchistan $371 million, and Pakistan-occupied Kashmir $281 million. Overall, 84 per cent of external public debt is held by the federal government and 16 per cent by provinces.Pakistan’s economy has been gradually recovering after two years of instability. The IMF had recently reached a staff-level agreement with Islamabad on loan programmes, enabling access to $1.2 billion under its Extended Fund Facility and Resilience and Sustainability Facility, pending board approval. The agreement aims to strengthen macroeconomic stability, rebuild market confidence, and support fiscal and structural reforms.The Economic Survey 2024–25 had indicated Pakistan’s economy grew 2.5 per cent in 2024, with projected 2.7 per cent growth for 2025. Fiscal improvements included a current account surplus of $1.9 billion during July–April FY25, and rising remittances estimated at $37–38 billion by year-end. The survey also noted external reserves had increased to $16.64 billion by June 2025, reflecting improved investor confidence and global ratings upgrades.
Pakistan’s economy collapsing? Public debt rises to $286.8 billion; debt-to-GDP ratio hits 70% – The Times of India
