Pakistan’s government will spend a huge amount on debt payments in the new fiscal year. According to the federal budget for 2025-26, interest payments and debt servicing will reach about Rs 8.207 trillion. This is nearly half of the total budget of Rs 17.573 trillion.
This large sum shows the heavy burden of past borrowing. Pakistan’s total public debt has grown to around Rs 80 trillion. High interest rates and new loans to cover old debts have made the problem bigger. Debt servicing now takes more money than defence, development, health, or education combined.
This huge sum leaves very little for other important sectors. Only a small part of the budget goes to building roads, schools, and hospitals. Many people worry that high debt stops economic growth and increases poverty. The government is trying to fix this by improving tax collection, controlling spending, and paying some debts early.
The budget was made with help from the IMF. It aims for better fiscal discipline. Inflation is lower, and reserves are stronger, but the debt trap remains a big challenge. Without strong reforms, future budgets will stay under pressure.
Pakistan needs to grow its economy faster, raise more revenue, and borrow wisely. This can slowly reduce the debt load and free money for the people’s needs. The coming year will test whether the government can balance payments with real development.
