Managing external debt

Pakistan’s debt has crossed Rs100 trillion, raising doubts about the credibility of the country’s stabilization program. But the article argues that the headline figure alone does not show whether the debt burden can be managed.

Absolute debt totals and per-capita debt, it says, are not the right measures. A clearer assessment should compare public debt and debt servicing with national income, exports of goods and services, government revenue, total foreign-exchange earnings and foreign-exchange reserves. These indicators offer a better guide to the country’s future capacity to meet its obligations.

The article also seeks to clarify the terms behind the debate. Pakistan’s total debt and liabilities consist of public and private debt. Public debt represented 91% of the outstanding stock on June 30, 2026, while private debt accounted for the remaining 9%. Most private debt is owed to foreign borrowers, and the government has no direct fiscal obligation for it. The State Bank of Pakistan, however, must provide the foreign exchange needed to service that debt.