Pakistan's total debt registers sharp rise, reveals finance ministry report
- By Shoaib Nizami -
- Oct 24, 2025
ISLAMABAD: Pakistan’s total debt has increased fourfold over the past ten years, ARY News reported on Friday, quoting official report of the finance ministry.
As per details, the documents reveal that in the last decade, Pakistan’s debt-to-GDP ratio has risen by more than 10 percent — from 60 per cent in 2016 to 71 per cent in 2025.
In fiscal year 2025, 89 per cent of the federal government’s net income was spent on debt servicing, while in fiscal year 2023, this figure reached 120 percent.
Over the past ten years, Pakistan’s domestic debt has increased from Rs.13.6 trillion to Rs.54.5 trillion, the documents show.
According to the ministry of finance, Pakistan’s external debt stood at Rs.6 trillion in 2016 and rose to Rs.26 trillion by June 2025.
The documents warn that if fiscal discipline is not maintained, the country’s debt-to-GDP ratio could rise to 85 per cent by 2035.
They also state that during the past ten years, 89 per cent of the total amount spent on debt servicing went toward interest payments, while only 11 percent was used to repay the principal amount.
Earlier, the International Monetary Fund (IMF) released its Fiscal Monitor Report 2025, presenting updated data on Pakistan’s fiscal deficit, revenue, expenditures, and public debt indicators.
According to the report, Pakistan’s public debt-to-GDP ratio is expected to decline gradually, falling from 71.6 percent in 2024 to 71.3 percent this year. Over the next five years, the ratio is projected to decrease further to 60.2 percent.
However, the IMF noted that Pakistan’s fiscal deficit is likely to rise in the current financial year, reaching 4.1 percent of GDP, slightly above the target of 3.9 percent. The deficit is expected to narrow gradually to 2.8 percent over the next five years.