Pakistan’s total national debt has surged past a staggering Rs. 70 trillion in just two months, as the country grapples with escalating financial challenges, economic instability, and mounting inflation. The rapid increase in debt highlights the ongoing fiscal crisis and puts further strain on the government’s ability to stabilize the economy.
According to the latest data released by the Ministry of Finance, Pakistan’s national debt stood at Rs. 69 trillion in early August 2024, but by early October, it had crossed the Rs. 70 trillion mark. The sharp rise in borrowing has been attributed to a combination of factors, including a widening fiscal deficit, a drop in foreign exchange reserves, and the need for additional loans to service existing debt.
Experts warn that the growing debt burden could have significant long-term implications for the country’s economic outlook, including a higher risk of default and continued pressure on the Pakistani rupee. With inflation hitting record highs and foreign aid difficult to secure, the government faces difficult choices in managing its financial obligations.
“The debt spiral has become a critical concern,” said Dr. Sami Ullah Khan, an economist at the Islamabad-based think tank, Economic Research Institute of Pakistan (ERIP). “Pakistan’s debt sustainability is at risk, and if the situation is not addressed, it could lead to even harsher economic consequences in the near future.”
Government officials have defended the borrowing as necessary to meet the country’s immediate financial needs and ensure the continuity of essential services. However, critics argue that without major structural reforms and a clear debt-reduction strategy, Pakistan could face even deeper economic turmoil.
International financial institutions, including the International Monetary Fund (IMF), have called on Pakistan to strengthen fiscal discipline and enhance tax collection in order to avoid further borrowing and curb the debt crisis.
With the general elections on the horizon and economic conditions deteriorating, the government’s ability to address these issues will be under intense scrutiny.
