Pakistan's debt clock hits Rs82tr: here's what it means
According to the State Bank of Pakistan (SBP), the government's total debt, excluding other liabilities and IMF loans, increased by Rs5.9 trillion in just one year, from June 2025 to May 2026. That works out to an average of Rs16 billion added to the debt pile every single day.
Where is this debt coming from?
Domestic debt rose to Rs58.1 trillion, an increase of Rs4.7 trillion in a year. Within this, long-term domestic debt grew by Rs2 trillion, while short-term domestic debt jumped by a sharp 32%, rising from Rs8.1 trillion to Rs10.7 trillion. This is a bit surprising because interest rates have actually been coming down — normally, falling rates should mean the government borrows more comfortably through long-term loans rather than short-term ones.
External debt, on the other hand, grew more slowly, rising by Rs1.3 trillion to reach Rs23.8 trillion. This was mainly because the rupee held steady against the US dollar this year, which kept the rupee value of foreign loans from ballooning the way it has in past years.
One number stands out: short-term external debt jumped from just Rs201 billion a year ago to Rs2.7 trillion now. The central bank says this happened because some long-term foreign loans were simply reclassified as short-term, meaning the government now owes a lot more money in the near future than it did before.
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Why this matters
Interest payments alone on this debt are expected to cross Rs8 trillion this year. That's money the government must pay just to service old loans, leaving less for schools, hospitals, or infrastructure.
Pakistan's Auditor General has objected to how the finance ministry planned its loan repayments, pointing to what it called Rs1.83 trillion in unnecessary excess spending due to poor budgeting. Adding to the concern, the country's Debt Management Office has had no permanent head for six months, running instead on an ad-hoc basis.
This growing debt comes even as Pakistan has told the IMF and public that it's trying to repay loans early and improve its debt-to-GDP ratio, which officials say has improved from around 74% to near 70% in recent years.
For ordinary Pakistanis, this debt burden usually shows up indirectly: through taxes, inflation, and less government spending on public services, as more of the national budget goes toward simply paying off old debt.
