Pakistan's debt hits record Rs 81.9 trillion, highest in nation's history

Pakistan's central government debt has surged to a record Rs 81.93 trillion after increasing by Rs 1.4 trillion in April alone, highlighting growing fiscal stress and the country's continued reliance on borrowing to fund government expenditure, according to a report.The report, published by Business Recorder, said the latest debt figures suggests persistent structural weaknesses in Pakistan's public finances despite repeated warnings about fiscal sustainability and the country's rising debt burden.It said the central government's debt expanded by more than Rs 4 trillion during the first 10 months of the current financial year.Of the total increase, domestic debt accounted for over Rs 3.6 trillion, while external debt rose by more than Rs 400 billion.The sharp increase in April was attributed to higher domestic as well as external borrowing, reflecting the government's continued dependence on loans to finance budget deficits and meet debt repayment obligations.According to the report, successive governments have increasingly relied on borrowing to finance current expenditure and service existing debt, creating a cycle that has become progressively more difficult to reverse.

It noted that despite repeated warnings from economists, international financial institutions and policymakers over weak revenue mobilisation and persistent fiscal deficits, Pakistan's debt burden has continued to rise.The report added that the growing debt stock has wider economic consequences, as an increasing share of government resources is diverted towards debt servicing instead of investment in education, healthcare, infrastructure and social welfare.It also warned that geopolitical tensions in West Asia have introduced fresh uncertainty by pushing up global energy prices and increasing pressure on Pakistan's external accounts through higher oil import costs.According to the report, Pakistan will need stronger revenue generation, tighter control over public spending and sustained structural reforms to place its finances on a more sustainable footing.It cautioned that unless the underlying causes of rising borrowing are addressed, the country could face even greater fiscal challenges in the years ahead.