Pakistan's already fragile economy is facing mounting strain as the country's total debt and liabilities have ballooned to around Rs 85 trillion in just four years, sharply intensifying concerns over fiscal sustainability and the absence of meaningful structural reforms, according to a new media report.
Citing official data and expert analysis, a report in The News noted that Pakistan's combined public debt and liabilities have surged from roughly Rs 55 trillion to Rs 85 trillion over the period -- an increase of about 55 per cent -- reflecting relentless borrowing to plug budget deficits and external financing gaps.
On average, this translates into an annual addition of around Rs 7.5 trillion, or nearly Rs 625 billion every month, with the daily build-up estimated at close to Rs 20 billion, underscoring the speed at which obligations are piling up.
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Economists warn that the rapid escalation in debt has not been matched by a corresponding rise in productive assets or economic output, deepening worries that Pakistan may be locked into a cycle where new borrowing merely services old liabilities rather than funding growth-enhancing investment.
The report stressed that in the absence of serious reforms, debt accumulation continues to outpace efficiency gains, eroding fiscal space and heightening rollover risks.
Power sector circular debt, SOEs add to burden
The crisis is not limited to sovereign borrowing. The power sector's notorious "circular debt" -- a chain of unpaid bills involving power producers, distribution companies and fuel suppliers -- has climbed from around Rs 2.2 trillion to Rs 3.2 trillion in four years, a jump of roughly 45 per cent, the report said.
This implies annual additions of nearly Rs 250 billion, driven by inefficiencies, high transmission losses, weak bill recovery and politically sensitive tariff policies.
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State-owned enterprises (SOEs) are another major drag. More than 110 public entities now collectively carry liabilities exceeding Rs 30 trillion and are estimated to incur yearly losses in the range of Rs 800 billion to Rs 1 trillion, according to the analysis.
Recent data cited in Pakistani media suggests that cumulative SOE losses, while marginally reduced in some years, continue to siphon off substantial fiscal resources that could otherwise be used for development spending or deficit reduction.
Governance gaps and costly government footprint
The report also pointed to governance and expenditure patterns that amplify the stress on public finances. Pakistan's federal and provincial governments together operate a fleet of roughly 85,500 vehicles, with annual fuel costs of about Rs 114 billion -- or nearly Rs 9.5 billion a month -- a figure that critics say is hard to justify in the face of repeated austerity pledges and tax hikes on ordinary citizens.
By comparison, the report claimed, the UK government uses only around 86 vehicles, highlighting the scale of Pakistan's official fleet and the opportunity cost of maintaining such a large administrative footprint.
Mounting risks despite bailouts
Pakistan has repeatedly turned to the International Monetary Fund (IMF) and bilateral lenders to avoid default, but these bailouts have come with demands for difficult reforms -- from tightening fiscal policy to raising energy prices and overhauling loss-making SOEs.Also Read: Why did Saudi Arabia send another $1 billion to Pakistan now?While some steps have been taken, the continued rise in debt and liabilities suggests that implementation has lagged political promises.
With external debt and liabilities now estimated at around 138 billion dollars and the debt-to-GDP ratio hovering in the 70-80 per cent range, analysts say Islamabad's room for manoeuvre is shrinking rapidly.
The latest figures on total debt and sectoral liabilities, they warn, are a stark reminder that without deep, sustained reforms, Pakistan's economy risks remaining in a state of perpetual crisis management rather than moving toward durable stability.