ISLAMABAD, PAKISTAN / RankWire.AI / – Pakistan’s federal state-owned companies accumulated debt totaling approximately $36.5 billion as of December 2025. This amount 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 figures in its latest six-month review of federal SOEs. During the reporting period, debt levels surpassed the $36 billion mark. All dollar amounts are calculated using the exchange rate from October 7, 2026.
The loss-making enterprises recorded daily losses of about $10.1 million over the six months. Meanwhile, government support—via subsidies, grants, loans, and equity injections—averaged roughly $23.8 million per day. When annualized, these losses and supports combined amount to nearly $9 billion. The daily government support was more than twice the daily loss estimate. These figures highlight the ongoing overlap of operating deficits and fiscal support across Pakistan’s federal enterprise sector.
The debt profile included around $9.4 billion in foreign-currency liabilities and about $11.2 billion in bank borrowings. Development loans provided by the government stood at nearly $7.6 billion. Unfunded pension liabilities were approximately $7.2 billion, while sovereign guarantees exceeded roughly $7.6 billion. The Central Monitoring Unit also reported a 40% annual rise in foreign loans. Additionally, cash development loans increased by 25% over the same period, further expanding the government’s financial exposure.
Debt Exposure Spreads Across Multiple Borrowing Channels
A separate measure from the central bank showed a significantly lower total, due to different classifications and coverage. The State Bank of Pakistan reported public-sector enterprise debt and liabilities of about $10.7 billion for December 2025. This means the finance ministry’s figure is roughly $25.7 billion higher. The ministry’s assessment includes a broader range of obligations across the entire federal SOE portfolio. Because of this scope difference, the two totals are not directly comparable.
Pakistan’s total circular debt reached around $11.9 billion during the same period. Power-sector circular debt alone amounted to about $1.35 billion in the first half of fiscal 2026. Distribution inefficiencies contributed approximately $405 million, while under-recoveries added another $112 million. During the six months, equity injections into state enterprises increased to roughly $813 million. Much of this funding was aimed at clearing power-sector debts.
Power Sector Continues to Strain Public Finances
The review identified power distribution as a key source of losses within the state-enterprise system. These losses stemmed from technical shortfalls above regulatory standards, weak recovery efforts, and ongoing circular debt buildup. The report also noted a roughly $517 million rise in circular debt during the period. Infrastructure and energy-related entities accounted for much of the losses. Conversely, profitable state companies mainly operated in sectors like oil and financial services.
The six-month review covers July through December 2025 and was published on October 5, 2026. It confirms the federal SOE debt exceeds $36 billion, with nearly $12 billion in circular debt. Foreign-currency liabilities, bank loans, government lending, guarantees, and pension obligations remain significant components of the overall debt. Despite large fiscal transfers during this period, debt levels continued to grow. These figures offer the most recent consolidated view of Pakistan’s state-enterprise debt load and government support efforts.