Pakistan's debt increases to PRs 76,000 billion by end-March 2025

Islamabad: Pakistan's debt has increased to PRs 76,000 billion in the first nine months of the current fiscal year, according to the economic survey, which indicated that the cash-strapped country's economy is likely to grow by 2.7 per cent this year.

Finance Minister Muhammad Aurangzeb, who released the Economic Survey 2024-25 Monday, said Pakistan's economy has been on the path to recovery for the last two years, and the process was further stabilised and strengthened in the current fiscal year.

The survey is a key pre-budget document highlighting the economic performance of the government in the fiscal year 2024-25. Pakistan's financial year begins on July 1.

In the first nine months of the current fiscal year, the government's debt increased to PRs (Pakistani Rupees) 76,000 billion, including PRs 51,500 billion from local banks and PRs 24,500 billion in loans from external sources, according to the document, which comes a day before the presentation of the budget.

Addressing a press conference after launching the economic survey, Aurangzeb said the GDP growth in 2023 was -0.2pc, which rose to 2.5pc in 2024.

"This year, we announced a 2.7pc growth for 2025. This is a gradual recovery and the right way to go about it is to focus on sustainable growth,” he said.

He also placed Pakistan’s recovery within the broader global context, noting that the global GDP growth has reached 2.8 per cent.

"The next fiscal year will be a turnaround story,” he said, setting the tone for a budget expected to aim for IMF compliance, increased revenue, and growth-focused reforms.

Highlighting macroeconomic indicators, Aurangzeb said the current account recorded a surplus of $1.9 billion during July–April FY25, driven by strong IT exports, which were about $3.5 billion.

“Remittances are projected to reach $37–38 billion by year-end, up from $27 billion two years ago,” he said.

Talking about macroeconomic indicators, the minister said, “public debt and debt-to-GDP ratio was 68 per cent, which is now 65 per cent.

He said forex reserves as of June 30, 2024, were $9.4 billion, which was a remarkable recovery from 2023 when Pakistan was down to two weeks of import cover.

He said foreign exchange reserves rose to $16.64 billion in 2025, boosted by improved economic indicators and renewed investor confidence. Of the total reserves, the State Bank of Pakistan held $11.5 billion, while commercial banks retained $5.14 billion.

He said that the increase follows improved credit ratings, with Fitch upgrading Pakistan’s sovereign rating from CCC+ to B- with a stable outlook.

The minister announced plans to privatise 24 state-owned enterprises (SOEs) in the coming year, after curbing annual losses of Rs800 billion.

Aurangzeb said that the size of Pakistan's economy increased to USD 411 billion in the current fiscal year, which was USD 372 billion in the previous fiscal year.

The survey showed that Pakistan's literacy rate remained at 67 per cent, with Punjab having the highest literacy rate at 66 per cent. Sindh had a literacy rate of 57.5 per cent, Khyber Pakhtunkhwa had 51 per cent, and Balochistan had a literacy rate of 42 per cent.

It showed that exports were $27.3 billion while imports $48.6 billion.

Meanwhile, National Assembly Speaker Ayaz Sadiq approved the schedule for the upcoming sessions to present and discuss the federal budget for 2025–26.

According to the approved schedule, the budget will be presented in the National Assembly on June 10. The assembly would remain in recess on June 11 and 12, and the budget debate would commence on June 13.

The general discussion on the budget will continue until June 21, and the debate will formally conclude on the same day.

On June 23, the National Assembly will hold a discussion on the charged expenditures for the fiscal year 2025–26, which will be followed by debates and voting on Demands for Grants and Cut Motions on June 24 and 25.

The Finance Bill 2025 will be taken up for approval by the National Assembly on June 26, while Supplementary Grants and other related matters will be discussed and voted on June 27.