Total Debt on Pakistan in 2025 | Pakistan’s Qarza

O My God! I can’t Believe a Pakistani Person has to Pay PKR 302,000 ($1,083) in the Term of Loan (Pakistan’s Debt) based on a Population of 240 Million. Pakistan’s debt situation remains a critical concern in 2025, influencing economic policies, international relations, and domestic fiscal strategies.
With public debt reaching PKR 72.3 trillion ($259.3 billion), understanding the composition, implications, and sustainability of this debt is crucial. This article provides a comprehensive analysis of Pakistan’s total debt, its impact on the economy, repayment challenges, and future outlook, referencing the latest Debt Sustainability Analysis (DSA) Report and economic reports.
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Pakistan’s Total Public Debt in 2025

As per the latest data:
- Total Public Debt: PKR 72.3 trillion ($259.3 billion)
- Per Capita Debt: PKR 302,000 ($1,083) per person (based on a population of 240 million)
- Domestic Debt: PKR 49 trillion (~67.7% of total debt)
- External Debt: The remaining debt is owed to external creditors, including the IMF, World Bank, and bilateral partners
Current Debt Statistics
Debt Category | Amount (PKR) | Amount (USD) |
---|---|---|
Total Public Debt | PKR 72.3 trillion | $259.3 billion |
Per Capita Debt | PKR 302,000 | $1,083 |
Domestic Debt | PKR 49 trillion | $175.7 billion |
External Debt | PKR 23.3 trillion | $83.6 billion |
Breakdown of Debt
- Domestic Debt (66.2%): Raised through government securities like T-Bills, Pakistan Investment Bonds (PIBs), and Sukuks.
- External Debt (33.8%): Owed to multilateral institutions (IMF, World Bank, ADB), bilateral creditors (Saudi Arabia, UAE), and commercial sources.
Debt Repayment & Interest Payments in 2025
Pakistan faces external debt repayments of $30.35 billion from August 2024 to July 2025, including:
- $26.48 billion in maturing foreign debt.
- $3.86 billion in interest payments.
- Significant repayments due in June and July 2025 (~$9-10 billion).
Despite the IMF Extended Fund Facility (EFF) of $7 billion, Pakistan’s rising debt servicing costs highlight the need for structural economic reforms.
Debt-to-GDP Ratio & Trends
Key Highlights:
- Debt-to-GDP ratio reduced to 70.4% in FY2024 from 79.0% in FY2023.
- Expected to decline further to 66.6% by FY2027 under fiscal consolidation and economic growth.
- External debt-to-GDP dropped to 20.2% (Aug 2024) from 27.6% (Aug 2023).
Comparison with Previous Years
Year | Debt-to-GDP (%) | External Debt-to-GDP (%) |
---|---|---|
FY2023 | 79.0% | 27.6% |
FY2024 | 70.4% | 20.2% |
FY2025 (Projected) | 68.6% | 19.5% |
FY2027 (Projected) | 66.6% | 18.0% |
Projected Debt Trends for 2025-2027
1. Debt Sustainability Analysis (DSA) Projections
According to the DSA Report (FY2025-2027):
- Debt-to-GDP Ratio: Expected to decline from 70.4% (2024) to 66.6% (2027).
- External Debt Risks: Depreciation of PKR, rising interest rates, and economic slowdowns could worsen sustainability.
- Financing Needs: Gross financing requirement expected to stay high, averaging $25 billion annually.
2. Future Borrowing Plans
- New External Loans: Expected to raise $3-4 billion in FY25.
- Eurobonds & Sukuk: Planned for late FY25 or FY26, subject to credit rating improvements.
- Foreign Direct Investment (FDI): Expected inflows of $2 billion.
Factors Contributing to Pakistan’s Debt Accumulation
1. Current Account Deficit (CAD)
Pakistan’s foreign debt has historically grown due to the need to finance its current account deficit (CAD). Over the past decade, CAD growth has mirrored the rise in external loans. To combat this, policymakers are implementing stricter import controls.
2. High Fiscal Deficit & Government Borrowing
- Pakistan continues to borrow internally and externally to finance its budget deficit.
- Debt-to-GDP Ratio: Despite a decline from 27.6% (2024) to 20.2% (2025) due to economic recovery, it remains a key concern.
3. Rising Interest Payments
- A large portion of Pakistan’s domestic debt is floating-rate debt (74%), making it vulnerable to interest rate hikes.
- Interest payments are increasing annually, worsening the debt burden.
How Does Pakistan Compare Globally?
Country | Total Debt (USD Billion) | Debt-to-GDP Ratio (%) |
Pakistan | 259.3 | 20.2 |
India | ~3,900 | 81.9 |
Bangladesh | ~145 | 39.2 |
Sri Lanka | ~104 | 128.1 |
While Pakistan’s debt-to-GDP ratio is lower than many countries, its high repayment obligations and dependence on foreign borrowing make it vulnerable to economic shocks.
Pakistan’s Debt Management Strategies
The government has outlined multiple strategies to manage its rising debt burden:
- Fiscal Discipline & Tax Reforms
- Increasing tax revenue via widening the tax base and improving compliance.
- Reducing unnecessary government expenditures.
- Exchange Rate Stability & Foreign Reserves Management
- Strengthening foreign exchange reserves through export growth and remittances.
- Diversifying Debt Sources
- Floating Eurobonds & Sukuks in global markets.
- Securing concessional loans from the World Bank & ADB.
- Encouraging Foreign Direct Investment (FDI)
- Targeting export-oriented industries (agriculture, minerals, IT, energy).
The Way Forward: Sustainable Economic Growth
Economic growth and fiscal prudence are key to managing debt sustainably. The government is implementing reforms focused on:
- Boosting industrial productivity and exports.
- Reducing reliance on imports to control the current account deficit.
- Enhancing economic competitiveness through digitalization and policy reforms.
Expert Notes & Recommendations
- Muhammad Sohail (CEO, Topline Securities): “Pakistan’s gross external financing requirement is at a 9-year low, contradicting the perception that the country must repay record-high amounts in the coming years.”
- Tahir Abbas (Head of Research, Arif Habib Limited): “Containing the current account deficit at a break-even level is crucial to reducing external borrowing and stabilizing debt.”
FAQs on Pakistan’s Debt
1. Why is Pakistan’s debt increasing?
Pakistan’s debt has grown due to fiscal deficits, high-interest payments, and currency depreciation.
2. Is Pakistan at risk of defaulting on its debt?
While repayment pressure is high, the IMF bailout and secured financing sources reduce default risks.
3. How can Pakistan reduce its debt burden?
By increasing exports, attracting FDI, improving tax revenues, and controlling fiscal deficits.
Conclusion
Pakistan’s public debt in 2025 stands at PKR 72.3 trillion ($259.3 billion), with a per capita debt of PKR 302,000. While the debt-to-GDP ratio is on a downward trend, external repayment pressures remain significant. Prudent fiscal management, economic reforms, and sustainable growth strategies are crucial to achieving long-term debt stability. The next few years are critical in shaping Pakistan’s economic resilience and reducing dependence on external debt.