Islamabad: Pakistan’s debt burden continues to mount, with the federal government’s total debt surging to a staggering Rs 81.9 trillion during the July–May period of the 2025–26 financial year. The figure, disclosed by Finance Minister Senator Muhammad Aurangzeb in a written reply to the National Assembly, does not even include loans taken from the International Monetary Fund (IMF).

Debt Mountain Swells by Rs 4 Trillion

Of the Rs 81.9 trillion debt pile, around Rs 58.1 trillion is domestic debt, while Rs 23.8 trillion is foreign debt.

The scale of the increase is stark. In July 2025, Pakistan’s federal government debt stood at Rs 77.9 trillion, including Rs 54.5 trillion in domestic debt and Rs 23.4 trillion in foreign debt.

Within just 11 months, the debt burden increased by approximately Rs 4 trillion, or 5.2 per cent. The government described this as the slowest 11-month pace of debt growth in 15 years, but the sheer size of the debt mountain highlights the severe financial pressures facing the country.

Debt-Reduction Promises Under Pressure

Pakistan’s Fiscal Responsibility and Debt Limitation Act provides for an annual reduction of 0.75 percentage points in the debt burden from financial year 2024, with the stated objective of bringing the debt-to-GDP ratio down to 50 per cent by 2033.

Despite these targets, Pakistan remains heavily dependent on borrowing and external financial support. The government insists that controlling the fiscal deficit and public debt is central to its economic strategy.

Debt-to-GDP Ratio Remains Elevated

The Finance Minister said Pakistan’s debt-to-GDP ratio was estimated at 68.5 per cent for June 2026. Based on figures available at the end of March 2026, the ratio for financial year 2025–26 was estimated at around 62.2 per cent.

The government has attributed the gradual decline in the ratio to fiscal reforms and improved debt management. However, the country’s enormous nominal debt burden continues to expose the fragility of its finances.

Saudi Support Provides Another Financial Lifeline

Pakistan has also continued to rely heavily on friendly countries for financial support. According to the Finance Minister, Saudi Arabia deposited US$3 billion with the State Bank of Pakistan in April 2026.

Saudi Arabia also rolled over its existing US$5 billion deposit with the SBP. The government said the combined support has played an important role in meeting Pakistan’s external financing requirements.

With debt climbing to Rs 81.9 trillion even before IMF borrowings are counted, Pakistan’s financial position remains under intense pressure, underscoring its continued dependence on borrowing, debt management measures and external financial lifelines.