Pakistan has borrowed Rs858 billion in the first five months of the fiscal year 2025-26 to manage its growing fiscal deficit and sustain economic activities. This significant borrowing reflects the government’s efforts to stabilize the Pakistan economy amid ongoing financial pressures.
Overview of Pakistan’s Borrowing in FY2025-26
According to the latest data released by the Ministry of Finance, Pakistan’s total borrowing between July and November 2025 reached Rs858 billion. The amount includes domestic and external loans, secured primarily to cover the budget deficit and support various development projects.
Reasons Behind Increased Borrowing
The government’s borrowing spree is linked to multiple factors including rising inflation, lower-than-expected revenue collection, and increased expenditures on social welfare and security, particularly in KP security operations. These pressures have forced the state to rely heavily on debt to keep the economy afloat.
Impact on Pakistan Economy
Experts warn that sustained high borrowing could affect Pakistan’s debt servicing capacity and put pressure on the national currency. However, officials maintain that controlled borrowing is essential for maintaining liquidity and funding crucial sectors such as infrastructure and aviation.
Government Response and Fiscal Measures
An official from the Ministry of Finance said, “Borrowing during the initial months of FY2025-26 was necessary to balance the budget and ensure uninterrupted public services. We are also focusing on tax reforms Pakistan to enhance revenue collection and reduce dependency on loans.”
Additionally, there are ongoing efforts to implement financial discipline alongside initiatives to boost exports and attract foreign investments. NEPRA decisions on energy pricing and High Court verdicts on tax recovery cases are also expected to positively influence the economic outlook.
Latest Updates and Future Outlook
With global diplomacy efforts intensifying and fluctuating energy prices impacting budget plans, Pakistan’s financial position remains under close scrutiny. Authorities continue to monitor borrowing trends closely to prevent escalation of fiscal risks.
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