Total Debt of Pakistan Hits Record Levels in 2025 – Shocking New Report by State Bank

Below is a concise analysis of Pakistan’s per capita debt and key economic insights based on the State Bank of Pakistan (SBP) June 2025 update, where total public debt reached PKR 76 trillion (USD 304 billion) by March 2025.

Metric	Value
Total Public Debt	PKR 76 trillion (USD 304 billion)
Domestic Debt	PKR 51.5 trillion (68% of total debt)
External Debt	PKR 24.5 trillion (USD 130 billion)
Population	~274 million (2024 estimate, adjusted for growth)
Per Capita Debt	PKR 277,372 (USD 1,110) per person
Debt-to-GDP Ratio	65.7% (down from 68% in 2023)
Debt Servicing (FY25 H1)	PKR 5.1 trillion (18% increase from FY24 H1)
Foreign Exchange Reserves	USD 16.64 billion (SBP: USD 11.5 billion, Commercial Banks: USD 5.14 billion)
External Debt Repayments	USD 30.35 billion due from August 2024 to July 2025
IMF Support	USD 7 billion EFF (USD 1.02 billion received as first tranche)

Key Analysis and Interesting Facts

1. Per Capita Debt Burden:
   • Each Pakistani owes PKR 277,372 (USD 1,110), up 21% from PKR 216,708 in 2022. This equals 4–5 months of average household income (PKR 60,000/month), straining living standards as 45% of Pakistanis (123 million) live below the poverty line.
   • Why It’s High: Fiscal deficits, rupee depreciation (USD 1 = PKR 278 in December 2024), and rising interest costs (PKR 5.1 trillion in July–December 2024) drive the increase.
2. Domestic Debt Dominates:
   • 68% of debt (PKR 51.5 trillion) is domestic, mainly from local banks. This is risky as 60% of bank assets are government securities, and restructuring could destabilize the banking system. Interest payments on domestic debt rose 18% in FY25’s first half.
3. External Debt Pressures:
   • External debt is USD 130 billion, with China as the largest creditor (USD 68.91 billion, 28% of external debt). Repayments of USD 30.35 billion are due by July 2025, but rollovers from China (USD 1 billion) and Saudi Arabia (USD 3 billion) provide relief.
4. IMF Lifeline:
   • A USD 7 billion IMF Extended Fund Facility (EFF) secured in September 2024 supports repayments until 2027. The first USD 1.02 billion tranche boosted reserves to USD 16.64 billion, up from USD 9.4 billion in 2023, covering two months of imports.
5. Poverty vs. Growth Disconnect:
   • Despite 2.5% GDP growth in 2024 and a projected 2.7% in 2025, 45% of Pakistanis live below the poverty line, with per capita income at USD 1,365—half that of India or Bangladesh. Debt servicing (40% of revenue) limits funds for education (60% literacy) and health (maternal mortality: 186/100,000) .

Implications and Outlook

• Economic Strain: Debt servicing (PKR 5.2 trillion projected for FY25) consumes revenue, starving development. The per capita debt of PKR 277,372 burdens a population where 123 million live in poverty.
• Stabilization Signs: The debt-to-GDP ratio fell to 65.7%, and a primary surplus of PKR 2.8 trillion in FY25’s first half shows fiscal discipline. Reserves at USD 16.64 billion offer short-term stability.
• Future Risks: Without deficit control, per capita debt could hit PKR 300,000 by 2026. Finance Minister Muhammad Aurangzeb’s “turnaround” plan for FY26 relies on tax reforms and privatization, but high inflation (peaked at 38% in 2023) and poverty pose challenges.

Disclaimer: Based on June 2025 SBP data. Verify details at sbp.org.pk. Exchange rates and population estimates may vary.