Pakistan\'s interest costs soar

Pakistan's public debt remained above the sustainable level in the last fiscal year, violating an Act of Parliament due to higher interest expenses, which also neutralised the benefits of exchange rate stability and reductions in other expenditures, states a new government report. The Debt Policy Statement 2025 from the Ministry of Finance officially confirmed that the government could not bring down the debt level to 56.75% of the size of the economy by the end of the last fiscal year. The limit had been set for the fiscal year 2023-24 under the Fiscal Responsibility and Debt Limitation Act. For this fiscal year, the ceiling will be further tightened to 56%. The Debt Policy Statement has been finalised on the heels of a World Bank Debt Heat Map report, which also flagged a lack of transparency in reporting Pakistan's debt indicators.