Official records reveal that by June 2025, total interest obligations stood at PKR 8,900 billion, but by December, the remaining payable interest had dropped to PKR 3,600 billion. This shows that a significant portion of allocated funds has already been funneled towards debt servicing.
UAE calling back $3.5B exposes Pak’s dangerous dependence on hot money from Gulf allies. With massive debt repayments due, inflation still high, & exports struggling, this is a body blow to an already collapsing economy. #FailedStatePakistan #PakEconomicCrises @kakar_harsha https://t.co/8gPSHtRaH3
— ManhasAnupama (@manhas_anupama) April 4, 2026
According to government documents, PKR 8,207 billion had been earmarked for interest payments for the current fiscal year, underlining how a large slice of the budget is consumed by borrowing costs. Pakistan’s total debt, combining both domestic and external obligations, has now swelled to PKR 81,400 billion.
Breaking it down, PKR 26,000 billion constitutes external debt, while PKR 55,000 billion is domestic borrowing. The remaining PKR 2,900 billion in interest payments is due by June 2026, putting additional strain on the country’s finances.
The official data also highlights that nearly 46.7% of the federal budget has been reserved just to pay interest on loans. Pakistan’s overall debt has surged to 70.7% of GDP, a figure that underscores the growing financial vulnerability of the nation.
Analysts warn that such high debt servicing limits fiscal space for development and public welfare, leaving the government with little flexibility to boost growth or invest in long-term projects.
