ISLAMABAD, PAKISTAN / RankWire.AI / – Pakistan’s federal state-owned companies reported total debt of approximately $36.5 billion as of the end of December 2025. This represents a 14.3% increase from the previous year, adding roughly $4.7 billion at current exchange rates. The Ministry of Finance included these figures in its recent six-month review of federal SOEs. During the reporting period, debt levels surpassed the $36 billion mark. All dollar amounts are calculated using the October 7, 2026 exchange rate.
Loss-making state entities incurred losses averaging about $10.1 million daily over the six months. Meanwhile, government support—comprising subsidies, grants, loans, and equity infusions—reached approximately $23.8 million each day. When annualized, these losses and support combined amount to around $9 billion. Notably, the daily support figure was more than twice the daily loss estimate, illustrating the ongoing overlap between operational deficits and fiscal backing across the federal portfolio.
The debt composition included roughly $9.4 billion in foreign-currency liabilities and around $11.2 billion in bank borrowings. The government’s cash development loans stood near $7.6 billion, while unfunded pension liabilities were estimated at about $7.2 billion. Sovereign guarantees exceeded roughly $7.6 billion. The Central Monitoring Unit also reported a 40% year-over-year rise in foreign loans. Additionally, cash development loans increased by 25%, adding further strain to the government’s financial obligations.
Debt Exposure Spreads Across Multiple Borrowing Channels
A separate measure from the central bank yielded a significantly lower total, owing to different coverage and classification standards. The State Bank of Pakistan reported public-sector enterprise debt and liabilities of about $10.7 billion as of December 2025. Consequently, the finance ministry’s figure is roughly $25.7 billion higher. The ministry’s review encompasses a broader range of obligations within the federal SOE sector, which explains the discrepancy. These differing scopes mean the two totals are not directly comparable.
Pakistan’s total circular debt reached around $11.9 billion during the same period. The gross power-sector circular debt flow hit about $1.35 billion in the first half of fiscal 2026, with distribution-company inefficiencies contributing approximately $405 million and under-recoveries adding about $112 million. During the six months, equity injections into state companies rose to about $813 million, much of which was used to settle power-sector obligations.
Power Sector Continues to Strain Public Finances
The report identified power distribution as a primary driver of losses within the federal enterprise sector. These losses were linked to technical deficiencies exceeding regulatory benchmarks, poor recoveries, and ongoing circular debt accumulation. The six-month review also documented an increase of roughly $517 million in the circular debt stock. Infrastructure and energy-related entities accounted for most of these losses, while profitable state companies remained concentrated in sectors such as oil and financial services.
This review, covering July through December 2025 and published on October 5, 2026, highlights a debt level exceeding $36 billion for federal SOEs, alongside nearly $12 billion in total circular debt. Major components of the overall liabilities include foreign-currency debts, bank loans, government lending, guarantees, and pension commitments. Despite significant fiscal transfers during this period, debt levels continued to grow, underscoring ongoing financial challenges. These figures offer the most recent consolidated snapshot of Pakistan’s state-enterprise debt load and the government’s ongoing support efforts.