Archive · 31 Jan 2026
Pakistan's Debt Crisis and Loan Appeals
Pakistan's government has admitted that the country's debt has become a big problem.
The debt of every person in Pakistan increased by 13% to Rs 333,000 last year.
The total debt of the country is now Rs 80.5 trillion, which is 70.7% of the country's total economic output (GDP).
This is higher than the limit set by the government.
The government spent more money than planned, especially on defense, while spending on development was less than planned.
The government also admitted that it had to beg for loans from other nations, saying that those who borrow have to compromise a lot.
They plan to manage the debt better in the future.
Pakistan's public debt increased to 70.7% of GDP, from 67.6% in the previous year.
Total public debt rose from Rs 71.2 trillion to Rs 80.5 trillion, driven by higher interest payments and exchange rate movements.
The budget deficit exceeded the statutory limit by Rs 3 trillion, with the government spending Rs 3.1 trillion more than allowed.
Defence expenditure was Rs 2.2 trillion, surpassing the budgeted Rs 2.1 trillion, while development expenditure was Rs 1.4 trillion, below the budgeted Rs 1.7 trillion.
The government acknowledged the debt challenge and plans to focus on reducing financing needs and diversifying financing instruments, admitting they had to beg for loans from other nations.
- Who
- Pakistan's finance ministry and the Shehbaz Sharif-led government
- What
- Public debt increased to 70.7% of GDP, exceeding the budget deficit limit, and the government admitted to begging for loans from other nations.
- When
- During the fiscal year 2024-25
- Where
- Pakistan
- Why
- Due to higher interest payments, exchange rate movements, spending beyond budget limits, and the need to fill external financing gaps.
Government's Perspective
Critics' Perspective
Debt Management
Government's Perspective
The government acknowledges the debt challenge and plans to focus on reducing financing needs and diversifying financing instruments.
Critics' Perspective
Critics argue that the government's spending beyond budget limits and lack of fiscal discipline have worsened the debt crisis.
Defense Spending
Government's Perspective
The government prioritizes defense expenditure, allocating Rs 2.2 trillion, which is essential for national security.
Critics' Perspective
Critics believe that the high defense spending contributes to the budget deficit and could be reduced to allocate more funds for development.
- Total Public Debt
- Rs 80.5 trillion
- Debt per Pakistani
- Rs 333,000
- Debt as % of GDP
- 70.7%
- Budget Deficit
- Rs 3.1 trillion
- Defence Expenditure
- Rs 2.2 trillion
- Development Expenditure
- Rs 1.4 trillion
- Fiscal Year
- 2024-25
- Government
- Shehbaz Sharif-led government
