ISLAMABAD: Details of Pakistan’s federal debt during the first 20 months of the current administration have been revealed, showing a sharp rise in both domestic and external debt, according to official documents.
During the period from March 2024 to October 2025, the federal government’s total debt increased by Rs. 12,169 billion, reflecting continued fiscal pressure and heavy reliance on borrowing.
Related: Govt Cuts Debt by Massive Rs 1.2 Trillion in Q1FY26
Domestic Debt Accounts for Majority of Increase
Documents issued by the State Bank of Pakistan (SBP) show that the bulk of the increase came from domestic borrowing. Federal government domestic debt rose by Rs. 11,300 billion during the 20-month period.
As of February 2024, domestic debt stood at Rs. 42,675 billion, which increased to Rs. 53,975 billion by October 2025. This sharp rise highlights the government’s dependence on internal financing to meet budgetary needs, debt servicing obligations, and development expenditures.
External Debt Also Sees an Uptick
Alongside domestic borrowing, the federal government’s external debt increased by Rs. 869 billion during the same period.
SBP data shows that external debt stood at Rs. 22,134 billion in February 2024, crossing Rs. 23,000 billion by October 2025. Although the increase in foreign borrowing was comparatively smaller, it still added pressure to Pakistan’s foreign exchange reserves and repayment obligations.
Total Federal Debt Nears Rs. 77 Trillion
As a result of the combined rise in domestic and external liabilities, the total federal government debt reached Rs. 76,979 billion by October 2025, compared to Rs. 64,810 billion in February 2024.
Economic analysts say the figures underline persistent fiscal challenges, including low revenue collection, rising interest payments, and limited space for development spending without additional borrowing.
Growing Fiscal Concerns
Experts warn that sustained increases in debt could further strain public finances unless accompanied by structural reforms, improved tax collection, and economic growth. Rising domestic debt, in particular, has implications for inflation and private sector credit availability, as government borrowing crowds out private investment.
Related: Pakistan Projects Lower Debt-to-GDP Ratio by 2028
The government has maintained that borrowing remains necessary to stabilize the economy and meet international obligations, while reforms under various fiscal and economic programs are aimed at gradually easing debt pressures.
