New Delhi: Pakistan’s central government debt has climbed to a record Rs 81.93 trillion after rising by Rs 1.4 trillion in April alone, underscoring mounting fiscal pressures and the country’s continued dependence on borrowing to finance its expenditure, according to a report.
The report published in Business Recorder said the latest debt figures reflect deep-rooted structural weaknesses in Pakistan’s public finances despite repeated warnings over fiscal sustainability and rising debt levels.
Central government debt increased by more than Rs 4 trillion (Pakistani rupee) during the first 10 months of the current fiscal year, it added.
Domestic debt accounted for over Rs 3.6 trillion of the increase, while external debt rose by more than Rs 400 billion.
The sharp rise in April was driven by both domestic and foreign borrowing, highlighting the government’s continued reliance on debt to bridge fiscal deficits and meet repayment obligations.
The report further highlighted that the country’s successive governments have relied on increased borrowing to finance current spending and debt servicing, creating a cycle that has become increasingly difficult to break.
Despite repeated concerns raised by economists, international financial institutions and policymakers over weak revenue mobilisation and persistent fiscal deficits, the country’s debt burden has continued to grow.
It added that the rising debt has significant implications for the economy, as a larger share of public resources is diverted towards debt servicing instead of sectors such as education, healthcare, infrastructure and social welfare.
In addition, the report warned that geopolitical tensions in West Asia have added fresh uncertainty by putting pressure on global energy markets and Pakistan’s external accounts through higher oil import costs.
Pakistan needs stronger revenue generation, tighter expenditure management and sustained structural reforms to place public finances on a more sustainable path, according to the report.
Without addressing the underlying causes of rising borrowing, the country risks facing even greater fiscal challenges in the years ahead.
(IANS)
