Reuters, Islamabad
Pakistan’s Economy Under Mounting Debt Pressure
Pakistan is sinking deeper into a financial crisis as its national debt reaches a historic high. According to the country’s latest Economic Survey 2024–25, Pakistan’s total debt has soared to PKR 76.007 trillion, nearly doubling in just four years and increasing nearly fivefold in the past decade.
Bleak Growth Amid Surging Liabilities
The survey estimates that Pakistan’s economy is expected to grow by 2.7% in the fiscal year ending June 2025, a downgrade from the earlier projection of 3.6%. Last year, the GDP grew by a modest 2.5%. The revised target highlights the persistent struggles of a nation grappling with debt, inflation, and a widening fiscal deficit.
Ambitious Targets, Stark Realities
Despite the grim economic indicators, Prime Minister Shehbaz Sharif’s government has set an ambitious 4.2% GDP growth target for 2025. The IMF projects a more modest 2.6% growth for FY 2025 and 3.6% for FY 2026.
Debt Doubles in Four Years
Pakistan’s debt has surged from PKR 39.86 trillion in 2020–21 to over PKR 76 trillion as of March 31, 2025. The unchecked rise in borrowing has significantly impacted the country’s financial stability. Experts warn that the mounting debt could hinder long-term recovery unless structural reforms are swiftly implemented.
Failing to Achieve Sustainable Growth
The quarterly GDP growth figures remain discouraging, with 1.37% in Q1, 1.53% in Q2, and 2.4% in Q3. This marks the third consecutive year of low economic growth, keeping Pakistan far behind its regional peers in development.
Dependence on External Aid Continues
Pakistan continues to approach international organizations and allied nations for financial assistance. Prime Minister Sharif himself admitted that foreign leaders expect Pakistan to seek funds whenever contact is made, further highlighting the country’s image crisis on the global stage.
Terror Financing Concerns Undermine Support
India has raised concerns at forums like the IMF and World Bank regarding Pakistan’s alleged misuse of international aid to fund terrorism. Such accusations have further isolated Pakistan diplomatically and economically.
Poverty Gap Widens with India
While India has made record strides in poverty alleviation, approximately 45% of Pakistan’s population lives in poverty, with 16.5% in extreme poverty, according to World Bank estimates. This growing disparity highlights the urgent need for economic reforms and transparent governance.
