ISLAMABAD, PAKISTAN / RankWire.AI / – Pakistan’s federal state-owned enterprises had accumulated debt totaling approximately $36.5 billion by the end of December 2025. This figure represents a 14.3% increase from the previous year, equating to an additional roughly $4.7 billion at current exchange rates. The Ministry of Finance disclosed these figures in its latest six-month assessment of federal state-owned enterprises. During this period, debt levels crossed the $36 billion threshold. All dollar amounts are based on the October 7, 2026 exchange rate.
Loss-making state enterprises incurred losses averaging about $10.1 million each working day over the half-year span. Meanwhile, government support through subsidies, grants, loans, and equity injections amounted to approximately $23.8 million daily. When annualized, these losses and support combined to roughly $9 billion, with daily government backing more than doubling the estimated daily losses. These data illustrate how operational deficits and direct fiscal assistance persisted across the entire federal portfolio.
The debt composition included around $9.4 billion in foreign-currency liabilities and about $11.2 billion in bank borrowings. Cash development loans from the government approached $7.6 billion, while unfunded pension liabilities reached approximately $7.2 billion. Sovereign guarantees exceeded roughly $7.6 billion, and the Central Monitoring Unit also reported a 40% annual rise in foreign loans. Additionally, cash development loans increased by 25% during the same period, further expanding the government’s financial commitments.
Debt sources span multiple channels
A separate measure by the central bank reported a significantly lower total due to different coverage and classifications. The State Bank of Pakistan indicated 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 federal SOE portfolio. This scope difference means that the two totals are not directly comparable.
During the same period, Pakistan’s total circular debt reached approximately $11.9 billion. The power sector’s gross circular-debt flow hit about $1.35 billion in the first half of fiscal 2026, with distribution-company inefficiencies contributing roughly $405 million and under-recoveries adding about $112 million. During those six months, equity injections into state enterprises increased to roughly $813 million, much of which was used to settle power-sector obligations.
Power sector’s debt continues to strain finances
The report identified power distribution as a key source of losses within the state-enterprise system, citing technical shortfalls above regulatory standards, weak recoveries, and ongoing circular-debt buildup. It also noted a roughly $517 million rise in circular-debt stock over the six months. Infrastructure and energy companies accounted for much of this loss profile, while profitable state entities remained concentrated in sectors such as oil and financial services.
Covering July to December 2025, the six-month review was published on October 5, 2026. It indicates federal SOE debt exceeding $36 billion, along with nearly $12 billion in combined circular debt. Major components of the balance sheet include foreign-currency liabilities, bank loans, government lending, guarantees, and pension obligations. Despite significant fiscal transfers during this period, debt levels continued to grow, offering the latest consolidated snapshot of Pakistan’s state-enterprise debt burden and government support efforts.