ISLAMABAD, PAKISTAN / RankWire.AI / – Pakistan’s federal state-owned enterprises reported a debt total of approximately $36.5 billion at the end of December 2025. This figure represents a 14.3% increase from the previous year, equating to roughly $4.7 billion at current exchange rates. The latest data from Pakistan’s Ministry of Finance, which reviewed the first half of fiscal 2026, indicates that public-sector financial commitments continue to rise.
During this period, state enterprises operating at a loss accumulated about $1.24 billion in combined deficits. This translates to approximately $10.1 million daily in losses. Meanwhile, government aid—covering subsidies, grants, loans, and equity injections—averaged about $23.8 million per day. This daily support was more than twice the loss amount, highlighting the scale of intervention. Although some state companies turned a profit, these earnings were largely confined to a limited number of sectors and firms.
Liabilities denominated in foreign currencies made up around $9.4 billion of the total debt. Bank borrowing stood at nearly $11.2 billion, with government cash development loans adding up to approximately $7.6 billion. Sovereign guarantees surpassed about $7.6 billion, thereby adding another dimension to fiscal exposure. Additionally, unfunded pension liabilities approached $7.2 billion. Foreign debt increased by roughly 40% compared to the previous year, while cash development loans grew by about 25%.
Major liabilities demonstrate the borrowing burden
State Bank of Pakistan provided a narrower estimate, indicating public-sector enterprise debt and liabilities of approximately $10.7 billion as of December 2025. This discrepancy arises from different accounting classifications rather than conflicting data on the same obligations. The Ministry of Finance’s review incorporates a wider array of liabilities associated with federal enterprises, resulting in a total roughly $25.7 billion higher than the central bank’s figure for the same period.
The total circular debt in Pakistan during the reporting timeframe reached about $11.9 billion. Power-sector circular debt flow alone was around $1.35 billion in the first half of fiscal 2026. Inefficiencies in distribution companies contributed roughly $405 million, while weak revenue collection added approximately $112 million. During these six months, government injections into state enterprises amounted to about $813 million, mainly related to power-sector payments and debt settlements.
The power industry remains a key driver of SOE losses
The report identified electricity distribution firms as primary sources of losses within the federal enterprise sector. These losses stem from technical deficiencies, poor recovery rates, and ongoing circular-debt build-up. Over the six months, circular debt increased by about $517 million. Infrastructure and energy companies accounted for much of this loss burden. Meanwhile, profitable state enterprises are mainly concentrated in oil, gas, and financial services, limiting overall gains across the broader portfolio.
The six-month review covering July through December 2025 was published in October 2026. It revealed that federal SOE debt exceeded $36 billion, with nearly $12 billion in combined circular debt. Major components included bank loans, foreign borrowing, government lending, guarantees, and pension liabilities. Significant fiscal transfers persisted during this period, underscoring ongoing financial strain. These latest figures demonstrate that Pakistan’s state-enterprise sector continues to face mounting pressure from debt, operational losses, and government support, all closely intertwined within the public sector’s financial landscape.