ISLAMABAD, PAKISTAN / RankWire.AI / – Pakistan’s federal government-controlled enterprises held debt totaling approximately $36.5 billion as of the end of December 2025. This figure represents a 14.3% increase from the previous year, adding around $4.7 billion based on current exchange rates. The Ministry of Finance disclosed these statistics in its latest six-month review of federal state-owned enterprises. During this period, debt levels surpassed the $36 billion mark. All dollar amounts cited are based on the October 7, 2026 exchange rate.
The loss-making state enterprises experienced daily losses of roughly $10.1 million over the six months. Meanwhile, government support through subsidies, grants, loans, and equity injections averaged about $23.8 million per day. When annualized, these losses and support combined to approximately $9 billion. The daily government support was more than twice the daily loss estimate, illustrating how operational deficits and direct fiscal aid continued to overlap within the federal portfolio.
The debt composition included around $9.4 billion in foreign currency liabilities and about $11.2 billion in bank borrowing. Additionally, cash development loans from the government were near $7.6 billion. Unfunded pension liabilities amounted to roughly $7.2 billion, with sovereign guarantees exceeding approximately $7.6 billion. The Central Monitoring Unit also reported a 40% annual rise in foreign loans. Over the same period, cash development loans grew by 25%, further increasing the government’s financial exposure.
Debt Exposure Is Spread Across Multiple Borrowing Channels
A separate measure from the central bank reported a significantly lower total, due to different coverage and classification criteria. The State Bank of Pakistan documented public-sector enterprise debt and liabilities of approximately $10.7 billion for December 2025. Consequently, the finance ministry’s figure was roughly $25.7 billion higher, reflecting a broader scope of obligations across the federal SOE portfolio. This difference indicates that the two totals are not directly comparable, given the variation in coverage.
During the same period, Pakistan’s total circular debt in the power sector reached about $11.9 billion. In the first half of fiscal year 2026, power-sector circular debt flow hit around $1.35 billion. Distribution-company inefficiencies contributed approximately $405 million, while under-recoveries added about $112 million. During the six months, equity injections into state enterprises increased to roughly $813 million, mainly to settle power-sector obligations.
The Power Sector Continues to Strain Public Finances
The report identified power distribution as a primary source of losses within the state enterprise sector, attributing these to technical shortfalls above regulatory benchmarks, poor recoveries, and ongoing circular-debt accumulation. It also noted a roughly $517 million rise in circular debt during the six-month span. Infrastructure and energy companies accounted for much of this loss profile, while profitable state entities remained concentrated in a limited number of sectors, such as oil and financial services.
The review, covering July through December 2025 and published on October 5, 2026, highlights that Pakistan’s federal SOE debt exceeds $36 billion, with nearly $12 billion in total circular debt. Major components of the liabilities include foreign-currency obligations, bank loans, government lending, guarantees, and pension commitments. Despite significant fiscal transfers during this period, debt levels continued to grow. These figures offer the most recent consolidated snapshot of Pakistan’s state-enterprise debt burden and the extent of government support involved.