A fresh revelation by the Ministry of Finance has highlighted the growing financial pressure on Pakistan’s economy, revealing how sharply the country’s public debt burden has increased over the past year.
According to the Annual Fiscal Policy Statement presented in Parliament, the per capita debt on every Pakistani citizen has surged by 13 percent, reaching Rs. 333,041 during the current fiscal year.
Per Capita Debt Sees Sharp Yearly Increase
The report shows that in FY 2023–24, the per capita debt stood at Rs. 294,098, which has now risen by nearly Rs. 39,000 in just one year.
These calculations are based on Pakistan’s estimated population of 241.5 million, underscoring how rapidly the public debt burden is spreading across the population.
Pakistan’s Total Public Debt Crosses Rs. 80 Trillion
The Ministry of Finance disclosed that total public debt increased from Rs. 71.2 trillion in June 2024 to Rs. 80.5 trillion by June 2025.
Officials cited high interest payments and exchange rate fluctuations as the primary reasons behind this sharp rise, calling public debt one of the biggest fiscal challenges faced during the last financial year.
Fiscal Deficit Exceeds Legal Limit
The report also admitted that Pakistan’s federal fiscal deficit reached 6.2 percent of GDP, significantly higher than the 3.5 percent limit set under the Fiscal Responsibility and Debt Limitation (FRDL) Act.
This means the government exceeded the legal deficit cap by nearly Rs. 3 trillion, raising concerns about fiscal discipline and long-term sustainability.
Debt-to-GDP Ratio and Rising Government Spending
Pakistan’s debt-to-GDP ratio increased from 67.6 percent to 70.7 percent, further tightening the country’s financial space.
Despite this, the report notes that during the same period:
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New federal departments were established
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The federal cabinet was expanded
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Additional vehicles and furniture were purchased
For FY 2024–25, total federal expenditure was budgeted at Rs. 18.9 trillion, with current expenditures alone reaching Rs. 17.2 trillion. The government spent an additional 2.7 percent of GDP beyond planned limits.
Tax Shortfall and Rising Defense, Interest Costs
The report highlighted that tax revenues stood at Rs. 11.7 trillion, achieving only 90.5 percent of the Rs. 13 trillion target.
However, non-tax revenue performed better than expected, reaching Rs. 5.1 trillion.
Key spending figures included:
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Development expenditure: Rs. 1.4 trillion (against Rs. 1.7 trillion budgeted)
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Defense spending: Rs. 2.2 trillion (higher than budgeted)
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Interest payments: Rs. 8.8 trillion
Growing Debt Raises Long-Term Concerns
Economic analysts warn that rising per capita debt, increasing interest obligations, and repeated fiscal slippages could further limit the government’s ability to spend on development, social protection, and public welfare in the coming years.
