Pakistan's total debt to reach Rs79 trillion by June 2025: Report

ISLAMABAD: The federal government has unveiled a 3-year economic plan, which aims to increase the share of provinces in the federal budget from 39.4% to 48.7% by 2027, ARY News reported.

According to the report, the provinces will receive Rs 10,350 billion by fiscal year 2026-27 under the National Finance Commission (NFC) Award.

The plan indicates an increase in provincial shares, with Rs 8,921 billion allocated for the next fiscal year 2025-26, and Rs 10,350 billion by 2026-27.

The current fiscal year will see a transfer of 39.4% of the budget to provinces under the NFC Award. The government has also acknowledged the need to revise the method of distributing resources to provinces under the NFC.

Additionally, the plan highlights the country’s debt burden, with total debts expected to reach Rs 79,731 billion by the end of the current fiscal year. Local loans are expected to increase by approximately Rs 7,671 billion, while foreign loans will rise by Rs 818 billion.

Read more: Pakistan secures $7bn aid deal with IMF

The government is taking measures to reduce the debt burden, including re-financing and interest rate risk management.

Earlier, Pakistan and the International Monetary Fund reached a three-year, $7 billion aid package deal, the Washington-based institution said.

The new programme, which needs to be validated by the Fund’s Executive Board, should enable Pakistan to “cement macroeconomic stability and create conditions for stronger, more inclusive and resilient growth,” according to a statement.