ISLAMABAD, PAKISTAN / RankWire.AI / – Pakistan’s federal state-owned enterprises carried a debt load of approximately $36.5 billion as of December 2025. This figure marked a 14.3% increase from the previous year, equating to an additional roughly $4.7 billion at current exchange rates. The latest data was provided by Pakistan’s Ministry of Finance in its recent review of federal state enterprises, covering the first half of fiscal 2026 and indicating an ongoing escalation in public-sector financial commitments.
During the same period, state enterprises operating at a loss accumulated an estimated $1.24 billion in combined deficits, translating to about $10.1 million each day that businesses were active. Government aid in the form of subsidies, grants, loans, and equity injections amounted to approximately $23.8 million daily, more than doubling the daily loss figure. While some state companies posted profits, these earnings were predominantly confined to a limited number of enterprises and sectors.
Liabilities denominated in foreign currency made up around $9.4 billion of the total debt. Bank borrowings approached $11.2 billion, with government cash development loans totaling approximately $7.6 billion. Sovereign guarantees exceeded $7.6 billion, adding an extra layer of fiscal risk. Unfunded pension liabilities were close to $7.2 billion. Foreign loans saw an increase of about 40% compared to the previous year, while cash development loans grew roughly 25%.
Major liabilities highlight the borrowing burden
A more limited measure from the State Bank of Pakistan indicated public-sector enterprise debt and liabilities of about $10.7 billion in December 2025. This discrepancy results from differing accounting classifications and coverage rather than conflicting measurements of the same obligations. The Ministry of Finance’s review encompasses a wider array of liabilities across federal enterprises, leading to a total roughly $25.7 billion higher than the central bank’s figure for the same period.
During the reporting period, Pakistan’s total circular debt reached approximately $11.9 billion. The power sector contributed around $1.35 billion to this figure in the first half of fiscal 2026, with distribution-company inefficiencies adding roughly $405 million and weak collection efforts increasing the total by about $112 million. State investments in enterprises during these six months amounted to about $813 million, primarily directed toward power-sector obligations and debt settlements.
Power sector remains a key driver of SOE losses
The report identified electricity distribution companies as significant contributors to the losses across the federal enterprise portfolio, citing technical deficiencies, poor recovery rates, and the persistent buildup of circular debt. Over the six-month period, circular-debt stock increased by approximately $517 million. Energy and infrastructure companies bore a substantial part of this burden, while profitable state enterprises remained mainly in the oil, gas, and financial services sectors, limiting overall gains in the broader portfolio.
The report, covering July through December 2025 and published in October 2026, underscores that federal SOE debt exceeds $36 billion, with nearly $12 billion in total circular debt. Components such as bank loans, foreign borrowing, government lending, guarantees, and pension obligations continue to play significant roles. Additionally, substantial fiscal transfers persisted during this period. These latest figures indicate that Pakistan’s state-enterprise finances remain under considerable pressure, with debt, losses, and government support remaining closely interconnected across the public sector.