New Delhi, March 13 Pakistan’s central government debt rose by over Rs 7 trillion in 2025 marking an increase of nearly 10 per cent — a trend that risks diverting resources away from private investment, job creation and public services, a report said on Friday.
An editorial in The Express Tribune warned that at the current rate Pakistan will become "a perennial contender for the world's worst-run country," without a quick resolution.
"Without a relatively quick resolution, debt management will cannibalise resources available for private investment and job creation, leaving us with a future of crushed dreams," the report said.
The surge in Pakistan's debt has been driven largely by domestic borrowing, as the cash‑strapped government turned to local markets to fill fiscal shortfalls even while external debt remained largely in check.
The unchecked pace of rising debt should alarm every Pakistani as the state is becoming economically unviable for future generations despite rosy promises by politicians, it argued.
Rising short‑term borrowing has made debt servicing more expensive and leaving the state dependent on fresh borrowing to meet maturing obligations, the report noted.
"For the broader economy, it also means less money is available for private investment, as banks and other financial institutions will prefer investing in government bonds rather than riskier investments in industries or entrepreneurs," the media house said.
Another recent report said Pakistan has locked itself into a "dangerous economic trap" by prioritising short‑term expatriate remittances and foreign aid over productive development.
Remittances now account for nearly 10 per cent of GDP and rival export earnings, masking failures of the system such as idle factories, high unemployment and underutilisation of productive workforce, it noted.
Since 1958, Pakistan has entered 26 IMF programs, the highest globally, totalling over $34 billion, with the latest $7 billion Extended Fund Facility in 2024 extended into 2025-26, the report said, highlighting the country’s ballooning aid dependence.
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