Pakistan’s Public Debt Soars by Rs. 8.34 Trillion, Fails to Meet FRDLA Targets

Despite reduced access to borrowing, the current government has failed to fulfill its obligations under the Financial Responsibility and Debt Limitation Act (FRDLA), with a significant increase in public debt. According to the Ministry of Finance’s debt report, Pakistan’s total public debt reached Rs. 71.2 trillion by the end of fiscal year 2024, a rise of Rs. 8.34 trillion from Rs. 62.8 trillion in the previous fiscal year.

The report indicates that domestic debt accounted for Rs. 47.16 trillion, while foreign debt stood at Rs. 24.08 trillion. Despite the government’s promises to reduce public debt, the fiscal imbalance has hindered any meaningful decrease. In the first quarter of fiscal year 2025, public debt saw a slight increase of 1.3%, reaching Rs. 72.13 trillion by September 2024.

In terms of the debt-to-GDP ratio, the figure declined by 7.7% to 67.2% in fiscal year 2024, compared to 74.9% in fiscal year 2023. On the external debt front, the report highlights that by the first quarter of fiscal year 2025, foreign debt surged to $88.7 billion. Of this, 56% came from multilateral financial institutions, including the IMF, while 28% was sourced from bilateral partners, including the Paris Club.

The government is now under pressure to address this growing debt burden, and questions remain as to whether Parliament will assert its authority and demand explanations from the government regarding its failure to meet financial commitments.