Pakistan’s public debt has surged by 340 percent over the past decade, reaching Rs86.715 trillion by June 2026, according to official data reported by The Nation. The increase represents a rise of around Rs67 trillion from Rs19.715 trillion recorded in June 2016.
The latest figures highlight the rapid expansion of Pakistan’s borrowing over the last 10 years, with the debt stock rising substantially despite efforts to improve fiscal management and reduce financing pressures.
Public Debt Climbs from Rs19.7 Trillion to Rs86.7 Trillion
Official data showed that Pakistan’s total public debt stood at Rs19.7 trillion in June 2016. It subsequently increased to Rs21.4 trillion in June 2017 and Rs24.9 trillion in June 2018.
The debt stock crossed Rs32.7 trillion by June 2019 and reached Rs36.4 trillion in June 2020. It then rose to Rs39.9 trillion in June 2021 before jumping to Rs49.3 trillion in June 2022.
Debt continued to increase, reaching Rs62.9 trillion in June 2023, Rs71.3 trillion in June 2024 and Rs80.5 trillion in June 2025.
By June 2026, total public debt had reached Rs86.715 trillion, representing a 7.7 percent year-on-year increase.
Domestic and External Debt
As of June 2026, domestic debt stood at approximately Rs59.4 trillion, while external public debt was recorded at Rs27.3 trillion. In comparison, domestic debt was Rs13.6 trillion and external debt Rs6.1 trillion in June 2016.
Separately, the Ministry of Finance’s Annual Debt Review reported total public debt at Rs86.72 trillion at the end of June 2026. It said the public debt-to-GDP ratio declined to 68.3 percent from 70.6 percent a year earlier.
The government’s debt position therefore reflects two simultaneous trends: a continued increase in the absolute debt stock and an improvement in the debt-to-GDP ratio during FY26.
Debt Accumulation Accelerates in Recent Years
The official year-wise figures show particularly strong increases in the debt stock after 2021.
Public debt rose by nearly Rs9.4 trillion between June 2021 and June 2022, followed by an increase of Rs13.6 trillion in the following year. The stock then climbed by more than Rs8 trillion in each of the next two years before reaching the latest Rs86.7 trillion level.
The Ministry of Finance has separately reported that total public debt increased 76 percent between June 2022 and June 2026. This reflects the difference between the longer 10-year comparison and the more recent four-year period.
Rupee Depreciation Adds to Debt Pressures
The report also highlighted the relationship between borrowing and the exchange rate.
According to the data cited by The Nation, the Pakistani rupee depreciated by 166 percent against the US dollar between June 2016 and June 2026, while public borrowing increased at a faster pace over the same period.
Exchange-rate movements are particularly relevant to Pakistan because a substantial portion of public debt is denominated in foreign currencies. Changes in the rupee’s value can therefore affect the domestic-currency cost of servicing external obligations.
External Debt Exposure Across Provinces
The federal government holds 84 percent of Pakistan’s external public debt, while provincial and sub-national governments account for the remaining 16 percent.
Among the provinces, Punjab is the largest borrower with $6.40 billion, followed by Sindh with $5.62 billion and Khyber Pakhtunkhwa with $2.97 billion.
Balochistan’s external debt stood at $390 million, while Gilgit-Baltistan and Azad Jammu and Kashmir accounted for $69 million and $180 million respectively.
Government Debt Management Remains a Key Challenge
The government’s latest debt-management strategy places greater emphasis on longer-term domestic borrowing, fixed-rate instruments and diversification of the debt portfolio.
The Annual Borrowing Plan for FY27 projects gross financing needs of Rs28.647 trillion, equivalent to around 20 percent of GDP. The government plans to raise Rs6.046 trillion through additional domestic borrowing and Rs813 billion through external borrowing for the year.
The Ministry of Finance has also highlighted the development of Shariah-compliant Sukuk markets, retail instruments and longer-term bonds as part of efforts to improve the structure of public debt.
Debt Burden Remains Central to Fiscal Policy
Pakistan’s public debt has expanded sharply over the past decade, although the latest debt-to-GDP ratio has improved.
The Annual Debt Review reported that interest expenditure fell 22 percent during FY26 to Rs6.948 trillion, while the federal fiscal deficit declined to Rs4.763 trillion from Rs7.089 trillion a year earlier. The federal primary surplus also increased to Rs2.185 trillion.
These improvements point to stronger fiscal consolidation in FY26, but the size of the overall debt stock means borrowing requirements and debt servicing will remain important considerations for fiscal policy.