Rising Debt of State-Owned Enterprises Poses Economic Risks, Finance Ministry Warns
Islamabad: Pakistan’s Ministry of Finance has warned that the growing debt burden of state-owned enterprises (SOEs) poses a serious threat to the country’s fiscal stability and economic growth.
According to the ministry’s annual consolidated performance report, the combined profit of SOEs declined by 13 percent during fiscal year 2024–25, falling from Rs820.7 billion to Rs709.9 billion.
The report revealed that the government extended financial support amounting to Rs2.1 trillion to SOEs during the last fiscal year. However, the net cash return provided by these entities to the government dropped sharply to just Rs40.7 billion, compared to Rs458.2 billion in the previous year—reflecting a steep 91 percent decline in net financial flows.
The Finance Ministry highlighted that increasing financial requirements of SOEs, along with reliance on government guarantees, subsidies, and circular debt, have placed a growing burden on the national exchequer.
Concerns were also raised regarding the oil and gas sector, which continues to face severe financial pressure due to circular debt. Delayed receivables from Pakistan State Oil (PSO) and the power sector have further aggravated liquidity challenges.
The ministry cautioned that without structural reforms and stricter financial discipline within SOEs, the situation could intensify pressure on public finances and undermine overall economic stability.
