ISLAMABAD, PAKISTAN / RankWire.AI / – Pakistan’s federal state-owned enterprises carried a debt load of approximately $36.5 billion as of December 2025, reflecting a 14.3% increase from the previous year, or roughly $4.7 billion at current exchange rates. The figures, reported by Pakistan’s Ministry of Finance in its latest review of federal state enterprises, cover the first half of fiscal 2026 and indicate a continuing rise in public-sector financial liabilities.
During that six-month period, loss-making state entities incurred combined losses of about $1.24 billion, equating to roughly $10.1 million daily, while government support in the form of subsidies, grants, loans, and equity injections averaged approximately $23.8 million per day—more than twice the daily loss amount. Although some state companies turned a profit, these gains were mainly confined to fewer enterprises and sectors.
Foreign-currency debts made up about $9.4 billion of the total debt, with bank borrowings nearing $11.2 billion and government cash development loans reaching around $7.6 billion. Sovereign guarantees exceeded $7.6 billion, adding further fiscal risk, while unfunded pension liabilities approached $7.2 billion. Foreign loans grew by roughly 40% compared to a year earlier, and cash development loans increased by approximately 25%.
Major liabilities highlight borrowing pressures
A narrower estimate from the State Bank of Pakistan indicated that public-sector enterprise debt and liabilities totaled about $10.7 billion in December 2025. This discrepancy stems from different accounting classifications rather than conflicting figures, as the finance ministry’s review encompasses a broader set of liabilities across federal enterprises, resulting in a total roughly $25.7 billion higher than the central bank’s figure for the same period.
Pakistan’s combined circular debt stood at approximately $11.9 billion during this period, with gross power-sector circular-debt flow reaching around $1.35 billion in the first half of fiscal 2026. Inefficiencies in distribution companies contributed roughly $405 million, while weak collection efforts added about $112 million. During these six months, equity injections into state enterprises amounted to roughly $813 million, mainly related to power-sector obligations and debt settlements.
Power sector remains key to SOE losses
The report identified electricity distribution companies as primary contributors to losses within the federal enterprise portfolio, attributing these to technical shortfalls, poor recovery rates, and ongoing circular-debt accumulation, which increased by about $517 million over the period. Infrastructure and energy-related entities bore much of this burden, while profitable state companies remained largely in oil, gas, and financial services, limiting overall gains across the sector.
The six-month review, covering July through December 2025 and published in October 2026, revealed federal SOE debt exceeding $36 billion and nearly $12 billion in combined circular debt. Key components included bank loans, foreign borrowing, government lending, guarantees, and pension liabilities. Additionally, substantial fiscal transfers persisted during this period. These latest figures underscore ongoing pressures on Pakistan’s state-enterprise finances, with debt, losses, and government support remaining tightly interconnected across the public sector.