ISLAMABAD, PAKISTAN / RankWire.AI / – Pakistan’s federal state-owned enterprises had accumulated debt totaling approximately $36.5 billion at the end of December 2025. This represents a 14.3% rise from the previous year, translating to an increase of roughly $4.7 billion at current exchange rates. The Ministry of Finance disclosed these figures in its latest six-month review of federal SOEs, revealing that debt levels surpassed the $36 billion threshold during this period. All dollar amounts mentioned are based on the October 7, 2026 exchange rate.
During the six-month span, loss-making state enterprises sustained losses averaging about $10.1 million each working day. Meanwhile, government interventions through subsidies, grants, loans, and equity injections amounted to approximately $23.8 million daily. When annualized, these combined losses and support figures approximate $9 billion, with daily government support being more than twice the daily loss estimate. These numbers underscore the ongoing overlap between operational losses and direct fiscal backing across Pakistan’s federal enterprise portfolio.
The debt composition included roughly $9.4 billion in liabilities denominated in foreign currencies and around $11.2 billion in bank borrowings. The government’s cash development loans stood near $7.6 billion, while unfunded pension liabilities were about $7.2 billion. Sovereign guarantees exceeded approximately $7.6 billion, and the Central Monitoring Unit also reported a 40% year-over-year increase in foreign loans. Additionally, cash development loans grew by 25% during the same period, further exposing the government to heightened financial risks.
Debt exposure spans multiple borrowing channels
A separate measure from the central bank produced a significantly lower total, as it employs different classifications and coverage. 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 was roughly $25.7 billion higher, reflecting a broader scope of obligations across the entire federal SOE portfolio. This discrepancy indicates that the two totals are not directly comparable due to their differing coverage and classification criteria.
Pakistan’s combined circular debt reached approximately $11.9 billion during the same reporting period, with the gross power-sector circular-debt flow hitting about $1.35 billion in the first half of fiscal 2026. Distribution-company inefficiencies contributed roughly $405 million, while under-recoveries added about $112 million. During the six months, equity injections into state enterprises increased to around $813 million, much of which was allocated toward settling power-sector obligations.
The power sector continues to strain public finances
The review identified power distribution as a primary source of financial losses within the state-enterprise sector, attributing these to technical shortfalls exceeding regulatory standards, inadequate recoveries, and the persistent accumulation of circular debt. It also noted a roughly $517 million rise in circular-debt stock over the period, with infrastructure and energy entities contributing the majority of the losses. Conversely, profitable state companies remained concentrated within a narrower array of sectors, including oil and financial services.
Covering July through December 2025 and published on October 5, 2026, the review highlights that the federal SOE debt exceeds $36 billion, coupled with nearly $12 billion in total circular debt. Major components of the liabilities include foreign-currency obligations, bank loans, government lending, guarantees, and pension liabilities. Despite substantial fiscal transfers during this period, debt levels continued to grow, offering the most recent consolidated insight into Pakistan’s ongoing state-enterprise debt burden and the government’s financial support measures.