Pak’s economy collapsing? Public debt rises to $286.8 bn; debt-to-GDP ratio hits 70%

Pakistan’s full nationalist indebtedness reached $286.832 cardinal (PKR 80.6 trillion) arsenic of June 2025, astir 13 per cent higher than the erstwhile year, according to authoritative information released by the ministry of concern successful its Annual Debt Review for FY25.

Of this, home indebtedness stood astatine PKR 54.5 trillion portion outer indebtedness was PKR 26.0 trillion, according to quality bureau PTI.The information showed the debt-to-GDP ratio accrued to astir 70 per cent successful June 2025, up from 68 per cent a twelvemonth earlier. The study attributed the emergence chiefly to lower-than-expected nominal GDP growth, with subdued ostentation slowing economical enlargement contempt fiscal consolidation efforts.Domestic indebtedness roseate 15 per cent year-on-year—the lowest summation successful 3 fiscal years—while outer indebtedness accrued by 6 per cent to $91.8 billion. The outer indebtedness maturation was supported by disbursements from the International Monetary Fund (IMF), an ADB-guarantee-backed commercialized indebtedness of $1 billion, and inflows from different multilateral institutions, arsenic per PTI.Provincial indebtedness besides increased, with Pakistan’s Punjab arsenic the largest borrower astatine $6.18 cardinal (7%), followed by Sindh astatine $4.67 cardinal (5%), which recorded the sharpest rise.

Khyber Pakhtunkhwa’s indebtedness reached $2.77 billion, Baluchistan $371 million, and Pakistan-occupied Kashmir $281 million. Overall, 84 per cent of outer nationalist indebtedness is held by the national authorities and 16 per cent by provinces.Pakistan’s system has been gradually recovering aft 2 years of instability. The IMF had precocious reached a staff-level statement with Islamabad connected indebtedness programmes, enabling entree to $1.2 cardinal nether its Extended Fund Facility and Resilience and Sustainability Facility, pending committee approval. The statement aims to fortify macroeconomic stability, rebuild marketplace confidence, and enactment fiscal and structural reforms.The Economic Survey 2024–25 had indicated Pakistan’s system grew 2.5 per cent successful 2024, with projected 2.7 per cent maturation for 2025. Fiscal improvements included a existent relationship surplus of $1.9 cardinal during July–April FY25, and rising remittances estimated astatine $37–38 cardinal by year-end. The survey besides noted outer reserves had accrued to $16.64 cardinal by June 2025, reflecting improved capitalist assurance and planetary ratings upgrades.