Pakistan’s total public debt reached Rs80.5 trillion by June 2025, up from Rs71.2 trillion a year earlier, while per capita public debt rose by 13 percent to Rs333,041, according to the Ministry of Finance’s Fiscal Policy Statement presented to Parliament. The increase came about as the federal fiscal deficit surpassed the statutory ceiling by Rs3.1 trillion in fiscal year 2024–25.

 

 

The statement showed that per capita debt climbed from Rs294,098 in FY24 to Rs333,041 in FY25, reflecting a rise of roughly Rs39,000, based on a population of 241.5 million. 

 

 

Public debt as a share of gross domestic product (GDP) increased from 67.6 percent in June 2024 to 70.7 percent in June 2025. The report described public debt dynamics as a continuing challenge during the last fiscal year, attributing the increase mainly to higher interest payments and movements in the exchange rate. It noted that additional borrowing was undertaken to finance expenditures beyond legal limits.

 

 

For FY25, the federal fiscal deficit was recorded at 6.2 percent of GDP, well above the 3.5 percent ceiling prescribed under the law. In absolute terms, the federal government spent Rs3.1 trillion, or 2.7 percent of GDP, more than the permitted deficit.

 

 

The statement detailed federal expenditures, noting that total spending was budgeted at Rs18.9 trillion, including current expenditure of Rs17.2 trillion. Actual current spending stood at Rs15.8 trillion, while development spending, including net lending, reached Rs1.4 trillion against a budgeted Rs1.7 trillion.

 

 

Interest payments amounted to Rs8.8 trillion, compared with the budgeted Rs9.8 trillion, reflecting lower-than-expected costs following a reduction in the State Bank of Pakistan’s policy rate. 

 

 

Defence expenditure was recorded at about Rs2.2 trillion, slightly above the allocated Rs2.1 trillion, while subsidies reached Rs1.3 trillion against an allocation of Rs1.36 trillion. Pension payments totaled Rs911 billion, compared with a budgeted Rs1 trillion.

 

 

On the revenue side, tax collection reached Rs11.7 trillion, achieving 90.5 percent of the Rs13 trillion target. Non-tax revenues exceeded expectations, rising to Rs5.1 trillion, or 104 percent of the budgeted amount, mainly due to higher petroleum levy receipts and central bank profits.

 

 

The statement noted that the overall fiscal balance, including provincial accounts, improved compared with budget estimates. 

 

 

The ministry said its medium-term debt management strategy continues to focus on reducing financing needs, extending maturities, and diversifying funding sources to support debt sustainability.