Articles by Naveed Butt | Zulfiqar Ahmad

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NA told: Public debt skyrockets by Rs9.3trn in FY25

ISLAMABAD: The National Assembly was informed on Friday that the country’s public debt surged by an alarming Rs9.3 trillion during the 2024-25 fiscal year, equating to a daily increase of Rs25.4 billion – an unsettling figure that questions fiscal oversight. In a written response to questions raised by lawmakers, Finance Minister Muhammad Aurangzeb confirmed that the public debt had risen by Rs9.3 trillion to Rs80.5 trillion by June 2025, equating to a daily increase of Rs25.4 billion. However, the minister clarified that under the Fiscal Responsibility and Debt Limitation Act (FRDLA) of 2005, which offers a narrower definition of public debt, the increase was Rs8.2 trillion, or Rs22.3 billion per day. Debt burden reaches alarming levels: Every Pakistani now owes Rs318,252 As a result, Pakistan’s public debt-to-GDP ratio climbed to 70.8% in FY25, up from 67.8% in FY24. Under the FRDLA definition, the ratio stood at 64.4%. The minister outlined a series of fiscal consolidation measures the government has introduced in an effort to manage the mounting debt burden. These measures include generating primary surpluses for two consecutive fiscal years to reduce deficit financing, shifting the borrowing strategy towards longer-term securities to mitigate refinancing risks, and conducting Pakistan’s first-ever sovereign debt buybacks. In FY25, the government bought back Rs1.5 trillion in debt, with another Rs1.1 trillion buyback scheduled for FY26. Aurangzeb also revealed that the government had successfully extended the average maturity of domestic debt from 2.8 years to 3.8 years, delivering interest expense savings of over Rs880 billion in FY25. Meanwhile, Minister for Planning, Development, and Special Initiatives, Ahsan Iqbal confirmed that eight China-Pakistan Economic Corridor (CPEC) projects, valued at around USD759.56 million, are currently under implementation. He added that, to date, 43 CPEC projects, with a total value of USD24.7 billion, have been completed. He also provided details on the ongoing implementation of five Public Sector Development Programme (PSDP) projects related to foreign scholarships, with a total cost of Rs54.7 billion, including Rs52.4 billion in foreign exchange components. The government has allocated Rs5.5 billion for these initiatives in the current fiscal year. Earlier, Minister of State for Finance Bilal Azhar Kayani highlighted the government’s focus on export-led growth, stressing that achieving macroeconomic stability was a prerequisite for sustainable economic development. He also pointed to the government’s efforts to enhance the tax base, including a reduction in tax rates for the salaried class in FY25. Copyright Business Recorder, 2025