Pakistan’s public debt climbed to $286 billion by the end of the 2024–25 fiscal year, a rise of 13 % from the previous year, a new report from Maldives Insight says. The news flags a debt level that is “unsustainable,” warning that the country’s recovery is fragile and its fiscal management has deep structural problems.
The report notes that Pakistan’s economy is not growing fast enough to outpace its debts. Instead, borrowing continues to be a habit, and interest payments now use most public funds. In fact, over 70 % of Pakistan’s GDP is owed to creditors, up from 68 % a year earlier.
Key figures from the Ministry of Finance’s Annual Debt Review 2025 show a fiscal deficit of $25.2 billion for the year. Most of that gap is filled via domestic borrowing, which has risen to $194 billion—about 15 % more than last year. External debt is also up, reaching $92.5 billion, a 6 % increase.
Although the average maturity of domestic debt is 3.8 years and external debt share has fallen, interest costs jumped 9 % year‑on‑year. This rise in debt service limits the amount of money available for development projects.
Multilateral lenders make up 57 % of external debt, bilateral lenders 26 %, and the rest comes from commercial borrowing, including Eurobonds. These numbers highlight how Pakistan’s economic independence is tied closely to the conditions and fluctuations of international creditors.
Bottom line: Pakistan’s fiscal health remains precarious. The country keeps borrowing to stay afloat, while its real economy struggles to generate enough revenue to meet its obligations. Even if debt figures appear more “manageable” on paper, the underlying economy is still fragile, dependent on external bailouts and prone to domestic credit traps.
Source: ianslive
Stay informed on all the latest news, real-time breaking news updates, and follow all the important headlines in world News on Latest NewsX. Follow us on social media Facebook, Twitter(X), Gettr and subscribe our Youtube Channel.
