In recent months, a striking and deeply concerning claim has repeatedly appeared in media discourse suggesting that Pakistan is accumulating around $40,000 of debt every minute, Media report. While this figure is not an official statistic, it reflects a broader fiscal reality derived from Pakistan’s rising debt trajectory. According to recent fiscal estimates, Pakistan’s total public debt has crossed approximately USD 250–300 billion, and annual borrowing requirements are generally assessed in the range of USD 25–35 billion. When translated into time-based averages, this reflects a rapidly accelerating pace of indebtedness that highlights structural fiscal stress rather than a symbolic exaggeration.

Recent fiscal trends indicate that Pakistan’s public debt continues to rise at a pace that is economically unsustainable. This does not represent cash inflow in real time, but it clearly reflects the intensity of fiscal pressure and the growing dependence on borrowing to sustain economic operations.

A critical but often underappreciated reality is the structure of this borrowing. A major portion originates from domestic sources, while external borrowing remains highly sensitive due to exchange rate and repayment pressures. This indicates that the crisis is not only external dependence but also a deep internal fiscal imbalance driven by weak revenue generation and persistent expenditure pressures.

The human dimension of this crisis is increasingly severe. With a population of around 240–250 million, the country’s debt burden translates into a per capita liability of approximately $1,100–$1,300 per citizen, and rising annually. In a country already facing high inflation and widespread poverty, this trend is steadily eroding household economic resilience and increasing vulnerability among lower-income groups. Poverty is becoming a structural outcome of fiscal imbalance.

Rising debt servicing costs are now consuming a major portion of national revenues. In several recent fiscal years, debt servicing has absorbed around 55–60% of federal revenue, leaving limited fiscal space for essential sectors such as education, health, and infrastructure. The economy is increasingly trapped in a cycle where new borrowing is required simply to service existing obligations.

A particularly alarming dimension lies in the management of development and recurrent expenditure. A significant concern in public financial systems is the leakage and inefficiency in resource utilization. These include cost overruns in development projects, chronic delays, weak procurement systems, and insufficient competitive transparency. Loss-making state-owned enterprises impose an estimated annual burden of PKR 500–800 billion, particularly through the energy sector and circular debt chain. Overlapping institutions and parallel administrative structures further create duplication, inefficiency, and diluted accountability. In some instances, the presence of ghost employees within payroll systems contributes to fiscal leakage, while poorly targeted subsidies intensify fiscal pressure. Collectively, these leakages silently erode the state’s capacity to invest in long-term development.

Another significant area of fiscal inefficiency is the misuse of official resources, particularly government transport. In several cases, official vehicles are reportedly being used by non-authorized personnel, leading to unnecessary fuel consumption, maintenance costs, and increased fiscal burden on the public exchequer. Such practices reflect weak administrative controls and inadequate enforcement of accountability mechanisms.

Equally concerning is the Public Sector Development Programme (PSDP). In Pakistan, PSDP allocations have recently ranged between PKR 1.1 trillion and PKR 1.4 trillion annually, yet actual utilization often remains lower due to delays, weak execution capacity, and repeated revisions. At this scale, inefficiency translates into massive national losses.
At its core, the crisis is no longer about debt alone—it is about systemic governance failure.

Without deep structural correction in taxation, public expenditure management, and institutional efficiency, stabilization will remain temporary and fragile.
The time for incremental adjustment has passed. What is now required is urgent and decisive transformation. Pakistan must shift from a consumption-driven, borrowing-dependent model toward a production-led and export-oriented economy.

The livestock sector represents a major underutilized opportunity, particularly in meat and dairy exports. Without investment in value addition, cold chain systems, and international compliance standards, this potential will remain unrealized. Inefficient state-owned enterprises must be restructured or closed as they continue to absorb scarce national resources without proportional returns.

Tax system reform is equally critical. Pakistan’s tax-to-GDP ratio remains around 9–10%, significantly lower than regional peers, reflecting a narrow tax base and weak enforcement. Broadening the tax net is essential to reduce fiscal pressure on citizens.

The situation demands immediate and uncompromising corrective action. Pakistan must urgently cut non-essential government expenditures and enforce strict fiscal discipline across all levels of the state. A uniform and rationalized pay structure across public sector institutions is essential to reduce unjustified disparities and improve fiscal efficiency. In this context, the proliferation of MP-I, MP-II and MP-III pay packages, along with project-based executive scales, must be discouraged, as these arrangements often result in selectively favoured appointments rather than merit-based selection, thereby weakening fiscal discipline and institutional fairness.

A serious reassessment is required, including the closure of non-performing autonomous bodies and redundant parallel organizations that continue to drain scarce national resources without delivering measurable outcomes. Equally important is the rationalization of entrenched privileges within the system, particularly the highly unequal official housing allocations, where government functionaries occupy residences ranging from 4 kanal to as high as 100 kanal properties, reflecting structural imbalance and inefficient use of public resources. These distortions must be addressed in the interest of fairness, administrative efficiency, and long-term fiscal sustainability. Above all, Pakistan must decisively shift toward industrialization, reduce import dependence, and aggressively promote export-led growth. The persistent imbalance between imports and exports must be corrected through structural reforms, value addition, and enhanced export competitiveness. Without these corrective measures, the cycle of borrowing will intensify further; with them, however, the country can begin restoring fiscal discipline, stabilizing its external account, and reclaiming economic sovereignty.

Dr Alamdar Hussain Malik
Advisor, Veterinary Sciences
University of Veterinary and Animal Sciences, Swat
Former Financial Adviser, Finance Division
Government of Pakistan