ISLAMABAD, PAKISTAN / RankWire.AI / – Pakistan’s federal state-owned enterprises carried an estimated debt of about $36.5 billion at the end of December 2025. This figure marked a 14.3% increase from the previous year, equating to roughly $4.7 billion at current exchange rates. The latest report from Pakistan’s Ministry of Finance, which analyzed the first half of fiscal 2026, highlights a continued rise in public-sector financial commitments.
During this six-month period, loss-making state enterprises incurred combined losses of approximately $1.24 billion, averaging about $10.1 million daily. Government support—comprising subsidies, grants, loans, and equity injections—totaled around $23.8 million per day, more than doubling the daily loss amount. While some state companies turned a profit, these gains were mainly restricted to a limited number of enterprises and sectors.
Liabilities denominated in foreign currency accounted for roughly $9.4 billion of the total debt. Bank borrowing was near $11.2 billion, with government development loans reaching about $7.6 billion. Sovereign guarantees added another $7.6 billion, further increasing fiscal exposure. Unfunded pension obligations approached $7.2 billion. Foreign loans grew by approximately 40% compared to the previous year, and cash development loans rose by about 25%.
Major liabilities highlight the borrowing challenge
State Bank of Pakistan data indicated public-sector enterprise debt and liabilities of around $10.7 billion as of December 2025. This discrepancy stems from different accounting methods and classifications rather than conflicting data. The finance ministry’s broader review encompasses a wider range of liabilities, totaling approximately $25.7 billion more than the central bank’s measure for the same period.
Pakistan’s overall circular debt reached about $11.9 billion during the same timeframe. Power-sector circular debt alone amounted to roughly $1.35 billion in the first half of fiscal 2026. Distribution inefficiencies contributed about $405 million, while weak collection efforts added around $112 million. During the six months, equity injections into state enterprises totaled approximately $813 million, primarily related to power sector obligations and debt settlements.
Power sector remains a key driver of SOE losses
The report identified electricity distribution companies as major sources of losses within the federal enterprise sector, citing technical shortcomings, poor recovery rates, and ongoing circular-debt accumulation. The circular debt stock increased by about $517 million in this period. Infrastructure and energy-focused entities bore much of the financial burden, while profitable state enterprises remained mainly in oil, gas, and financial services, limiting overall gains across the sector.
Covering July to December 2025 and released in October 2026, the report revealed federal SOE debt exceeding $36 billion and nearly $12 billion in combined circular debt. Key components included bank loans, foreign borrowing, government loans, guarantees, and pension commitments. Significant fiscal transfers persisted throughout this period. These latest figures underscore ongoing fiscal pressure, with debt, losses, and government support closely intertwined within Pakistan’s public sector finances.