ISLAMABAD, PAKISTAN / RankWire.AI / – Pakistan’s federal state-owned enterprises had accumulated debt totaling approximately $36.5 billion at the end of December 2025. The figure marked a 14.3% increase from the previous year, adding about $4.7 billion at current exchange rates. The Ministry of Finance released these figures in its latest six-month assessment of federal SOEs. During the reporting period, debt levels surpassed the $36 billion threshold. All dollar amounts cited here are based on the October 7, 2026 exchange rate.
Loss-making state firms incurred losses averaging about $10.1 million daily over the six months. Meanwhile, government support through subsidies, grants, loans, and equity injections amounted to roughly $23.8 million each day. When annualized, these losses and support combined to nearly $9 billion. Notably, the daily support figure was more than twice the daily loss estimate. The data highlights how operational losses and direct fiscal aid continued to overlap across the entire federal enterprise portfolio.
The debt composition comprised roughly $9.4 billion in foreign currency liabilities and about $11.2 billion in bank borrowings. Development loans provided by the government stood at close to $7.6 billion. Unfunded pension obligations were estimated at $7.2 billion, with sovereign guarantees exceeding approximately $7.6 billion. The Central Monitoring Unit also reported a 40% year-on-year rise in foreign loans. Additionally, cash development loans increased by 25% during the same period, further expanding the government’s financial commitments.
Debt across multiple borrowing channels expands
A separate measure from the central bank produced a significantly lower total, owing to different coverage and classification criteria. The State Bank of Pakistan reported public-sector enterprise debt and liabilities of around $10.7 billion for December 2025. Consequently, the finance ministry’s figure was approximately $25.7 billion higher. The ministry’s review encompasses a broader range of obligations across the federal SOE sector. This scope difference means that the two totals are not directly comparable.
Pakistan’s overall circular debt reached roughly $11.9 billion during the same timeframe. The gross power-sector circular-debt flow was about $1.35 billion in the first half of fiscal 2026. Inefficiencies in distribution companies contributed roughly $405 million, while under-recoveries added approximately $112 million. During the six months, equity injections into state enterprises increased to about $813 million, largely to help settle power-sector obligations.
Power sector issues continue to strain public finances
The assessment identified power distribution as a key driver of losses within the state-enterprise system. These losses were linked to technical shortcomings above regulatory benchmarks, weak recovery rates, and persistent circular-debt buildup. The report also noted a roughly $517 million rise in circular-debt stock during the period. Infrastructure and energy firms accounted for much of the loss profile, while profitable state companies remained concentrated in a limited number of sectors, including oil and financial services.
Covering July through December 2025, the six-month review was published on October 5, 2026. It highlights federal SOE debt exceeding $36 billion and nearly $12 billion in combined circular debt. Major components of the liabilities include foreign-currency obligations, bank loans, government lending, guarantees, and pension commitments. Despite significant fiscal transfers during this period, debt levels continued to grow. These figures offer the latest consolidated view of Pakistan’s state-enterprise debt burden and the government’s financial support measures.