Rising debt exposes government’s failure

October 20, 2026

The federal government debt has increased by Rs18,143 billion between February 2024 and August 2026, raising serious questions about the government’s financial management and its ability to control borrowing. According to State Bank of Pakistan data, total federal government debt reached Rs82,953 billion in August 2026, compared with Rs64,810 billion in February 2024.

The increase of nearly Rs20 billion a day is alarming. Such a rapid rise in public debt places a heavy burden on the economy and raises concerns about the future cost of repayment. Borrowing is sometimes necessary to meet national needs, but it becomes a serious problem when governments fail to control spending, improve revenues and ensure that borrowed money produces lasting economic benefits.

The figures show that domestic debt accounted for most of the increase. It rose by Rs16,082 billion, from Rs42,675 billion in February 2024 to Rs58,757 billion in August 2026. External debt increased by Rs2,061 billion, reaching Rs24,196 billion.

The heavy reliance on domestic borrowing is particularly concerning. Government borrowing from local banks and financial markets can increase pressure on interest rates and make it harder for businesses to obtain affordable loans. When public borrowing absorbs a large share of available financing, private investment and job creation may suffer.

The government must also explain how this growing debt is being used. Citizens deserve to know whether borrowing is financing productive projects, improving public services and creating employment, or merely meeting routine expenses and servicing previous loans. Without transparency and accountability, rising debt can become a cycle in which new borrowing is needed to pay for old commitments.

Pakistan cannot solve its financial problems through borrowing alone. The government must widen the tax base fairly, reduce wasteful expenditure, improve the performance of public institutions and strengthen exports. It must also publish clear targets for managing debt and report regularly on progress.

Public debt is not just a figure in an official report. It affects the country’s economic choices and the resources available for education, healthcare and development. The government must stop treating repeated borrowing as a substitute for sound economic management.