The debt burden on every Pakistani increased by 13 per cent during the last fiscal year, reaching Rs333,041 per person, as rising public debt emerged as a major challenge for the government, according to the annual Fiscal Policy Statement presented by the Ministry of Finance in parliament.
The report said per capita public debt stood at Rs294,098 in fiscal year 2023-24 and rose to Rs333,041 in 2024-25, reflecting an increase of nearly Rs39,000 per person within a year. The calculation is based on an estimated population of 241.5 million.
According to the Ministry of Finance, total public debt rose from Rs71.2 trillion in June 2024 to Rs80.5 trillion by June 2025. The main drivers behind the increase were higher interest payments and changes in the exchange rate.
The report acknowledged that the public debt situation remained a key challenge throughout the previous fiscal year.
Under the Fiscal Responsibility and Debt Limitation (FRDL) Act, the federal government is required to present a fiscal policy statement to parliament at the end of each fiscal year.
The statement revealed that the federal fiscal deficit reached 6.2 per cent of gross domestic product (GDP), significantly higher than the legally allowed limit of 3.5 per cent. This means the government exceeded the statutory deficit ceiling by around Rs3 trillion.
The report further showed that total public debt increased from 67.6 per cent of GDP to 70.7 per cent during the year. It also noted that despite repeated claims of austerity, the government expanded the federal cabinet, established new departments and purchased new vehicles and furniture.
According to the finance ministry, total federal expenditures for fiscal year 2024-25 were budgeted at Rs18.9 trillion, of which current expenditures accounted for Rs17.2 trillion. The federal government incurred additional spending equivalent to 2.7 per cent of GDP.
On the revenue side, tax collection stood at Rs11.7 trillion, achieving 90.5 per cent of the revised target of Rs13 trillion. Non-tax revenues performed better than expected and reached Rs5.1 trillion.
Development spending remained lower than budgeted, with Rs1.4 trillion spent against an allocation of Rs1.7 trillion. In contrast, defence expenditures exceeded budget estimates and reached Rs2.2 trillion, while debt servicing costs rose to Rs8.8 trillion during the fiscal year.
