The weight of public debt on Pakistan’s government has reached critical levels, climbing to 70.7% of GDP in 2024-25 and shattering the 56% legal threshold. As per the newest ‘Debt Policy Statement 2026’, this overshoot totals 16.8 trillion rupees – 14.7% extra relative to GDP – exposing chronic lapses in budgetary control.
This pattern betrays a flawed system: outlays first, debt acquisition next, defenses contrived last. Discipline-enforcing regulations are flouted routinely, parliament notified belatedly, and leaders evade consequences.
Sustained by consumption over production, the economy resists change and debt-dependency festers. Budgets hemorrhage nearly 50% on repayments, crippling development funding. PSDP initiatives falter, investments critical for escape from debt chains diminish, and new taxes exacerbate public hardship.
Three-year trends show domestic debt service as the top expense, constricting expansionary efforts and perpetuating vicious cycles. Assurances from fiscal authorities appear increasingly untenable.
The administration owns up to the grim debt-to-GDP slide but pledges fidelity to responsibility acts through austerity, surpluses, and deficit trimming for long-term viability. Current fiscal signals are grim, however: FBR lagged 347 billion rupees behind targets in the opening months, heightening reliance on fiscal sleight-of-hand to soften the debt narrative.