Islamabad: Official data has revealed a significant and historic increase in Pakistan’s public debt during the first two years of the current federal government, raising concerns about fiscal sustainability and economic management. According to documents issued by the State Bank of Pakistan (SBP), the country’s total debt increased by approximately Rs 15,072 billion between March 2024 and February 2026, reflecting a sharp rise in borrowing over a relatively short period.

The figures show that the average daily increase in government debt during this two-year span was nearly Rs 21 billion, highlighting the scale and pace of accumulation. This rapid rise has sparked renewed debate among economists, policymakers, and financial analysts regarding the underlying causes of rising debt and its long-term implications for the economy.

According to the central bank’s breakdown, the increase in debt was driven by both domestic and external borrowing. Domestic debt recorded a surge of Rs 14,004 billion during the two-year period, forming the bulk of the overall increase. Meanwhile, external debt rose by approximately Rs 1,068 billion over the same timeframe, reflecting continued reliance on international financing sources to meet fiscal requirements.

As a result of this increase, Pakistan’s total federal government debt reached Rs 79,882 billion by February 2026. This marks a substantial rise compared to the end of the caretaker government’s tenure, when the total debt stood at Rs 64,810 billion in February 2024. The difference between these figures underscores the scale of borrowing that has taken place under the current administration.

Economists note that rising public debt is often influenced by a combination of factors, including budget deficits, interest payments, currency depreciation, and financing needs for development and operational expenditures. In Pakistan’s case, persistent fiscal deficits and high debt servicing costs have remained key challenges for successive governments.

The data also highlights the increasing burden of domestic borrowing, which typically involves raising funds through treasury bills, bonds, and other instruments issued within the local financial market. While domestic borrowing helps manage immediate financing needs, it also adds pressure on the banking system and can impact private sector credit availability.

External borrowing, although smaller in comparison, remains an important component of Pakistan’s debt profile. It includes loans from multilateral institutions, bilateral partners, and international capital markets. Exchange rate fluctuations can significantly affect the rupee value of external debt, often increasing the overall burden when the local currency weakens.

Financial experts argue that while borrowing is a necessary tool for managing economic operations and development projects, the sustainability of such debt depends on the country’s ability to generate revenue, control expenditures, and achieve consistent economic growth. Without structural reforms, rising debt levels can lead to long-term fiscal strain.

The reported increase has also revived discussions about the need for broader economic reforms, including expanding the tax base, improving revenue collection, reducing unnecessary expenditures, and enhancing export performance. Analysts believe that addressing these structural issues is critical to stabilizing public finances.

The government, on its part, has previously defended its borrowing strategy by linking it to economic stabilization efforts, infrastructure development, and repayment of existing obligations. Officials often argue that short-term increases in debt are sometimes necessary to support long-term economic recovery and growth initiatives.

However, critics point out that the continuous rise in debt places a heavy burden on future budgets, particularly due to rising interest payments, which consume a significant portion of national resources. This limits fiscal space for development spending in key sectors such as health, education, and infrastructure.

The SBP data provides a detailed snapshot of the country’s fiscal trajectory and is likely to fuel further debate in political and economic circles. As Pakistan continues to navigate complex economic challenges, managing public debt remains one of the most critical issues facing policymakers.

Overall, the sharp increase of Rs 15 trillion in just two years underscores the urgency of implementing effective fiscal reforms and ensuring sustainable economic management to avoid long-term financial pressure on the national economy.