Friday, February 7th, 2025

Pakistan’s total debt will reach 79 trillion Pakistani rupees by June 2025: Report


The Shehbaz Sharif-led Pakistan government presented a three-year economic plan that aims to increase the provinces’ share in the federal budget from 39.4 per cent to 48.7 per cent by 2027, ARY News reported.

The plan also sheds light on the country’s debt burden, according to which the total debt is expected to reach 79,731 billion PKR by the end of the current fiscal year. Local debts are expected to increase by around 7,671 billion PKR, while foreign debts will increase by 818 billion PKR.

The Pakistani government has claimed it is working to reduce the debt burden, including through refinancing and interest rate risk management.

According to the new plan, the provinces will receive 10,350 billion Pakistani Rupees (PKR) by the financial year 2026-27 under the National Finance Commission (NFC) award, reported ARY News.

This represents an increase in the provincial share, with PKR 8,921 billion allocated for the next fiscal year 2025-26 and PKR 10,350 billion by 2026-27.

39.4 per cent of the budget will be transferred to the provinces under the NFC award this fiscal year. The government has also acknowledged the need to revise the methodology of distributing resources to the provinces under the NFC.

Earlier, Pakistan and the International Monetary Fund had reached an agreement on a US$7 billion aid package for three years, ARY News reported.

According to an IMF statement, the new programme, which needs to be approved by the fund’s executive board, will help Pakistan “strengthen macroeconomic stability and create conditions for stronger, more inclusive and resilient growth.”

A report last month showed that Pakistan government borrowing in the first 11 months of the current fiscal year exceeded the combined figure of the previous two fiscal years, reports Dawn newspaper.

This massive borrowing of PKR 7.39 trillion from July 2023 to June 7, 2024, is more than the government’s collective borrowing of PKR 7.16 trillion in the previous two fiscal years (FY23 and FY22).



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