Pakistan’s central government debt surged to Rs. 78.5 trillion in December 2025, marking a 1.3 percent increase on a month-on-month (MoM) basis, according to the latest data released by the State Bank of Pakistan (SBP).
On a yearly basis, the debt stock rose 9.6 percent compared to Rs. 71.5 trillion in December 2024, reflecting continued borrowing to finance fiscal and external obligations.
External Debt Position
The federal government’s external debt stood at $82.7 billion in December 2025, up from $81.7 billion in November 2025.
In June 2025, external debt was recorded at $82.5 billion, indicating relatively stable but elevated foreign liabilities amid ongoing financing needs and currency pressures.
Domestic Debt Expands
Meanwhile, central government domestic debt increased by 11.0 percent year-on-year and 1.4 percent MoM to reach Rs. 55.4 trillion in December 2025.
A breakdown of domestic debt shows that:
- Long-term public debt rose from Rs. 41.1 trillion to Rs. 46.56 trillion over the past year.
- Short-term debt increased slightly from Rs. 8.69 trillion to Rs. 8.74 trillion during the same period.
The rising reliance on long-term instruments suggests efforts to manage refinancing risks, though the overall debt burden remains high.
Economists note that the steady rise in government debt reflects fiscal deficits, debt servicing costs, and development spending requirements. While domestic borrowing continues to dominate the debt profile, maintaining external sustainability and improving revenue generation remain critical challenges.
With debt levels approaching Rs. 80 trillion, fiscal discipline and structural reforms are expected to remain key priorities for policymakers in the coming months.
