ISLAMABAD, PAKISTAN / RankWire.AI / – Pakistan’s federal state-owned enterprises had accumulated approximately $36.5 billion in debt by the end of December 2025. This total reflects a 14.3% increase from the previous year, adding roughly $4.7 billion at current exchange rates. The figures were outlined in Pakistan’s Ministry of Finance’s latest assessment of federal state enterprises. The report, which covered the first half of fiscal 2026, indicated a continued rise in the financial liabilities of the public sector.
During the six-month period, loss-making state enterprises reported combined losses of about $1.24 billion. This averages out to approximately $10.1 million every working day. Government support, including subsidies, grants, loans, and equity injections, amounted to roughly $23.8 million daily. This level of assistance was more than twice the daily loss figure. While some state companies remained profitable, their gains were mainly confined to fewer enterprises and sectors.
Liabilities denominated in foreign currency accounted for about $9.4 billion of the total debt. Bank borrowing stood near $11.2 billion, while government cash development loans reached around $7.6 billion. Sovereign guarantees exceeded about $7.6 billion, adding further fiscal exposure. Unfunded pension obligations approached $7.2 billion. Foreign loans saw an increase of roughly 40% compared to the previous year, with cash development loans rising by about 25%.
Major Liabilities Highlight Borrowing and Fiscal Risks
A narrower measure from the State Bank of Pakistan indicated that public-sector enterprise debt and liabilities totaled approximately $10.7 billion in December 2025. This discrepancy stems from different accounting methods and classifications, not conflicting data on the same obligations. The finance ministry’s review encompasses a wider range of liabilities across federal enterprises, resulting in a total of roughly $25.7 billion more than the central bank’s figure for the same period.
During the same timeframe, Pakistan’s circular debt in the public sector reached about $11.9 billion. The gross flow of power-sector circular debt was around $1.35 billion in the first half of fiscal 2026. Inefficiencies among distribution companies contributed roughly $405 million, while weak collection efforts added about $112 million. State enterprise support through equity injections totaled approximately $813 million during these six months, much of which was linked to power-sector payments and debt settlements.
The Power Sector Continues to Drive SOE Losses
The assessment identified electricity distribution companies as a primary source of losses within the federal enterprise sector. These losses were attributed to technical shortcomings, poor revenue recoveries, and ongoing circular-debt accumulation. Over the six months, circular debt increased by roughly $517 million. Infrastructure and energy-related entities bore much of this burden. While some state enterprises remained profitable, mainly in oil, gas, and financial services, their gains were limited, and losses persisted across many sectors.
The report, covering July through December 2025 and published in October 2026, revealed that federal SOE debt exceeded $36 billion, with nearly $12 billion in combined circular debt. Bank loans, foreign borrowing, government lending, guarantees, and pension liabilities all formed significant parts of this financial picture. The period also saw continued large fiscal transfers. These latest figures underscore ongoing fiscal pressures on Pakistan’s state-enterprise sector, as debt, losses, and government support remain tightly interconnected across the public domain.