Pakistan’s Ministry of Finance presented detailed figures on national debt and interest payments for fiscal year 2025 in the Senate.. The total debt stood at Rs. 80.5 trillion, including Rs. 54.5 trillion in domestic debt and Rs. 26 trillion in external debt. Over recent years, Pakistan repaid Rs.16.5 trillion in FY21, Rs. 23.2 trillion in FY22, Rs. 30.2 trillion in FY23, Rs. 28 trillion in FY24, and Rs. 27.1 trillion in FY25.
Pakistan FY25 interest payments reached a historic high of Rs. 8.9 trillion, highlighting the growing fiscal pressure on the national economy as debt servicing costs continue to rise. Fresh details shared by the Ministry of Finance in the Senate of Pakistan reveal the scale of Pakistan’s debt burden and its impact on public finances.
During fiscal year 2025, Pakistan’s total public debt stood at Rs. 80.5 trillion. Of this amount, Rs. 54.5 trillion consisted of domestic debt, while external debt accounted for Rs. 26 trillion. Economists note that the increasing reliance on domestic borrowing, combined with high interest rates, has significantly pushed up Pakistan FY25 interest payments.
Interest Payments Rise Sharply Over Five Years
The upward trend in Pakistan FY25 interest payments becomes clearer when viewed over recent years. In FY21, interest payments stood at Rs. 2.7 trillion. This figure increased to Rs. 3.2 trillion in FY22 and then jumped sharply to Rs. 5.7 trillion in FY23. By FY24, interest payments had climbed further to Rs. 8.2 trillion, before reaching Rs. 8.9 trillion in FY25.
Financial analysts say the sharp rise reflects higher policy rates, increased borrowing to finance budget deficits, and limited fiscal space. Debt servicing now consumes a substantial portion of federal revenues, leaving less room for development spending and social sector investment.
Debt Repayment Pressures Continue
Alongside rising interest costs, Pakistan has also faced heavy debt repayment obligations. Over the past five fiscal years, repayments reached Rs. 16.5 trillion in FY21, Rs. 23.2 trillion in FY22, Rs. 30.2 trillion in FY23, Rs. 28 trillion in FY24, and Rs. 27.1 trillion in FY25. These figures underline how Pakistan FY25 interest payments add to the overall strain on fiscal management.
Experts warn that without sustained revenue growth and expenditure control, debt servicing pressures may continue to grow, especially if global interest rates remain elevated.
Trade Deficit Adds to Economic Stress
The Ministry of Commerce also presented trade data that sheds light on external sector challenges linked to Pakistan FY25 interest payments. In FY23, Pakistan recorded exports of $27.7 billion and imports of $55.2 billion, resulting in a trade deficit of $27.5 billion. In FY24, exports increased to $30.6 billion, while imports rose slightly to $55.7 billion, narrowing the deficit to $25.1 billion.
However, in FY25, exports reached $32 billion but imports climbed faster to $58.3 billion, pushing the trade deficit back up to $26.3 billion. Rising imports, particularly of energy and raw materials, continue to put pressure on foreign exchange reserves and borrowing needs.
Half-Year Data Shows Widening Gap
For the July–December 2025 period, exports stood at $15.135 billion, while imports surged to $34.475 billion. This resulted in a half-year trade deficit of $19.34 billion. Compared to the same period last year, exports declined by 9 percent, while imports rose by 12 percent. The widening trade gap further complicates efforts to manage Pakistan FY25 interest payments and stabilize the economy.
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Mixed Views in the Senate
Senators acknowledged that some economic indicators improved during the previous government’s tenure, particularly export growth. However, the latest figures highlight renewed pressure on the trade balance and public finances. Lawmakers stressed the need for sustainable export-led growth to reduce borrowing requirements and ease Pakistan FY25 interest payments over time.
Outlook Remains Challenging
Economists believe that managing Pakistan FY25 interest payments will remain one of the government’s biggest challenges. Structural reforms, improved tax collection, and controlled spending are seen as critical steps to reduce reliance on debt. Without these measures, rising interest costs may continue to limit fiscal flexibility and slow economic recovery.
