Pakistan’s economy is experiencing significant pressure with its total debt and liabilities soaring to Rs 85 trillion over the past four years, marking a steep increase in fiscal stress without substantial structural reforms. The country’s debt and liabilities have surged from about Rs 55 trillion four years ago to the current Rs 85 trillion, reflecting a substantial 55% rise. This equates to an average yearly increase of approximately Rs 7.5 trillion, emphasizing the continuous borrowing trend.
Liabilities have reportedly escalated by around Rs 625 billion monthly, with a daily accumulation of nearly Rs 20 billion, indicating the rapid pace at which fiscal obligations are accumulating in the economy. The expansion in debt has not been accompanied by a proportional growth in productive assets or economic output, raising concerns about the sustainability of public finances. The report underscores that without significant reforms, the debt accumulation continues to outstrip economic efficiency gains, intensifying pressure on fiscal stability.
The power sector in Pakistan mirrors a similar trend, with circular debt escalating from Rs 2.2 trillion to Rs 3.2 trillion over four years, marking a 45% increase. This suggests annual additions of about Rs 250 billion, driven by persistent inefficiencies, weak recoveries, and ongoing losses. State-owned enterprises (SOEs) pose a substantial burden, with over 110 entities carrying liabilities exceeding Rs 30 trillion and collectively incurring losses of Rs 800 billion to Rs 1 trillion annually.
Furthermore, Pakistan’s federal and provincial governments operate a fleet of approximately 85,500 vehicles, in stark contrast to the mere 86 vehicles used by the UK government. The annual fuel expenditure for these vehicles amounts to around Rs 114 billion or roughly Rs 9.5 billion per month, as per the report.
