PKR 76 trillion and counting: Pakistan's debt hits historic high, balloons 5 times in a decade

A man walks past a currency exchange shop in Rawalpindi on June 12, 2024.

Pakistan’s economy is on life support and the debt monitor is flatlining. Islamabad has hit a grim milestone, with public debt soaring to a record-breaking PKR 76 trillion (Rs 23.1 trillion in Indian rupee or USD 269 billion), according to the country’s economic survey 2024-25. The number paints a grim picture of Pakistan’s fiscal health, revealing a country heavily reliant on loans to stay afloat, even as it teeters under inflation, currency devaluation, and stagnant economic output.

According to Pakistan’s Economic Survey, reviewed by CNN-News18, in 2020–21, Pakistan’s public debt stood at PKR 39,860 billion. In just four years, it has nearly doubled. And over a 10-year span, the jump is even more alarming: from PKR 17,380 billion in 2014–15 to PKR 76,007 billion now — a five-fold increase.

This comprises of PKR 51,518 billion in domestic debt and PKR 24,489 billion in external debt. The Economic Survey of Pakistan has said that “excessive or poorly managed debt can pose serious vulnerabilities, such as rising interest burdens and can undermine long-term fiscal sustainability and economic security if left unaddressed."

A nation addicted to borrowing

Pakistan’s ballooning external debt is fuelled largely by loans from the IMF, including the latest disbursement of USD 1 billion (around Rs 8,500 crore). This disbursal was done as part of IMF’s Extended Fund Facility (EFF) to Pakistan.

The 37-month EFF was approved on September 25, 2024 and provides for a total disbursement of USD 7 billion to Pakistan. The latest tranche brings the total disbursements under the arrangement so far to about USD 2.1 billion.

Second is the mounting debt from China, through the China-Pakistan Economic Corridor (CPEC) and other bilateral agreements, which is estimated to be around $30 billion, much of it tied to high-interest infrastructure loans.

In total, Pakistan’s outstanding external debt and liabilities are estimated to be over USD 130 billion, making up almost 50% of its GDP.

The Pakistan Economic Survey itself warns: “Excessive or poorly managed debt can pose serious vulnerabilities, such as rising interest burdens and can undermine long-term fiscal sustainability and economic security if left unaddressed.”

And it’s already happening. Pakistan’s annual interest payments alone have consumed over 50% of federal revenues, leaving little room for development or social welfare. With a depreciating rupee and rising global interest rates, Pakistan is forced to borrow more just to pay off old loans.