
Debt-ridden Pakistan is about to face a PKR 6,552,700,000,000 bomb in a few months
Pakistan Economic Survey
2024–25. The government must settle these payments during 2025–26, and failure to do so could place the country on the edge of default.
By the end of March 2025, the country's total public debt stood at Rs 76.01 trillion. That includes Rs 51.52 trillion in domestic borrowing (roughly $180 billion) and Rs 24.49 trillion (around $87.4 billion) in external loans. The external debt is made up of two parts: money borrowed by the government and funds drawn from the International Monetary Fund (IMF).
Explore courses from Top Institutes in
Select a Course Category
Data Science
Public Policy
others
CXO
Finance
Cybersecurity
Digital Marketing
Data Analytics
Leadership
Artificial Intelligence
MCA
healthcare
Project Management
Others
Data Science
PGDM
Product Management
Management
MBA
Design Thinking
Technology
Healthcare
Degree
Operations Management
Skills you'll gain:
Duration:
10 Months
IIM Kozhikode
CERT-IIMK DABS India
Starts on
undefined
Get Details
Skills you'll gain:
Duration:
30 Weeks
IIM Kozhikode
SEPO - IIMK-AI for Senior Executives India
Starts on
undefined
Get Details
Skills you'll gain:
Duration:
11 Months
E&ICT Academy, Indian Institute of Technology Guwahati
CERT-IITG Postgraduate Cert in AI and ML India
Starts on
undefined
Get Details
Skills you'll gain:
Duration:
11 Months
IIT Madras
CERT-IITM Advanced Cert Prog in AI and ML India
Starts on
undefined
Get Details
Skills you'll gain:
Duration:
10 Months
E&ICT Academy, Indian Institute of Technology Guwahati
CERT-IITG Prof Cert in DS & BA with GenAI India
Starts on
undefined
Get Details
This debt has built up over years of economic mismanagement, stop-gap funding, and repeated bailouts. But this year's repayment demand has exposed just how little room the government has left to manoeuvre.
Lifeline or liability? $12 billion in temporary deposits
Of the $23 billion Pakistan must repay this year, $12 billion comes in the form of temporary deposits from four so-called friendly nations, as reported by PTI. These are:
$5 billion from Saudi Arabia
$4 billion from China
$2 billion from the UAE
$1 billion from Qatar
These funds are not permanent and are only useful if rolled over. If any of these countries decide to pull out, Pakistan will be forced to pay them back in full this year.
Live Events
The News cautioned, 'The situation can worsen if friendly countries refuse to grant rollovers on their deposits, which would make it compulsory for the government to make payments.'
This leaves the government heavily dependent on diplomatic goodwill, not financial strength. And there are signs that even goodwill is wearing thin.
$11 billion still to pay regardless
Even if all the temporary deposits are extended, Pakistan must still cough up around $11 billion in repayments to external creditors this year, as reported by PTI. This includes:
$1.7 billion in international bond repayments
$2.3 billion in commercial loan payments
$2.8 billion to multilateral creditors including the World Bank, Asian Development Bank, Islamic Development Bank, and Asian Infrastructure Investment Bank
$1.8 billion in bilateral loan repayments
This pressure comes at a time when Pakistan's foreign reserves are already under stress. The country has limited sources of fresh income and is still waiting for a new extended programme from the IMF.
Debt now consumes nearly half of federal budget
Pakistan has earmarked Rs 8.2 trillion for domestic and external debt servicing in its 2025–26 budget. That figure makes up 46.7 per cent of the total federal budget of Rs 17.573 trillion.
Put simply, nearly half the money Islamabad plans to spend this year is going towards repaying old loans.
There is now less left for development, public services, or even basic maintenance of existing infrastructure. Education, health, and social welfare continue to take a backseat while interest payments dominate national spending.
Military spending continues despite fiscal strain
Despite this bleak financial outlook, Pakistan's defence expenditure has not slowed. While seeking bailouts and rollovers, the government has pressed ahead with large arms deals.
It has finalised a strategic partnership with Turkey, which includes a $900 million drone deal and more than 700 loitering munitions. The partnership also covers intelligence sharing and broader security cooperation.
The alliance has been described as one meant to 'do jihad against India' by military sources cited in reports. There are also ambitious trade goals of $5 billion tied into the arrangement.
Additionally, Pakistan is reportedly acquiring 40 J-35A stealth fighter jets from China, supposedly at a discounted rate.
These deals reflect the enduring priority given to military parity, particularly with India, even as the country's own economy remains fragile.
A crisis years in the making
Pakistan's current position is the result of decades of reckless borrowing, lack of fiscal discipline, and a powerful military establishment unwilling to scale back.
The military, which has long seen itself as the guardian of national stability, has also been a major recipient of foreign aid and loans. Much of that money, critics say, has gone not into productive assets or economic upliftment but into defence and patronage.
The result is a hollow economy, propped up by emergency funding, foreign deposits, and repeated IMF interventions.
While Pakistan hopes for another round of diplomatic backing, there's no guarantee this time. Saudi Arabia has already begun demanding more reform and transparency before offering further help. China, facing its own economic headwinds, is also proceeding more cautiously.
If even one major depositor refuses to roll over its funds, Islamabad will have no choice but to pay. And with limited reserves and few avenues for quick capital, that could lead to further economic distress or forced austerity.
For now, Pakistan is racing the clock. The first repayments are due in a matter of months. And there's little sign of a long-term fix in sight.
Hashtags

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles


Hans India
27 minutes ago
- Hans India
Pahalgam mastermind among 3 killed in J&K encounter
Srinagar: As Defence Minister Rajnath Singh began the Operation Sindoor debate in Parliament, security forces scored a massive win on Monday by gunning down three Pakistani terrorists in an encounter near Srinagar, two of them involved in the Pahalgam attack in which 26 innocents were murdered in cold blood. Suleiman Shah, a Lashkar-e-Taiba terrorist, was identified as the mastermind of the April 22 terror attack that shook the nation. Security sources have confirmed that he was among the terrorists killed in the encounter in the morning. Monday's operation, named Operation Mahadev, neutralised two other terrorists: Abu Hamza and Yasir. Yasir, too, is believed to be among the Pahalgam killers. Security forces from the Army, CRPF and Jammu and Kashmir Police were part of the joint operation. Suleiman served in the Pakistan Army and was also known as Hashim Moosa. In the aftermath of the terror attack at Pahalgam's Baisaran Valley, the Jammu and Kashmir Police had announced a Rs 20 lakh reward on anyone providing information about Suleiman. All the terrorists, it is learnt, were "high-value" targets. According to reports, the security forces acted on an intelligence input and launched the operation in the Mulnar area of Harwan. Reinforcements have been rushed to the area and a combing exercise is on. "It is a prolonged operation and is still continuing in which J&K police, paramilitary and army have an exchange of fire (with terrorists) in higher reaches. It is an ongoing operation, and we will share details with you at an opportune time,' the police said.


Time of India
27 minutes ago
- Time of India
Troubles deepen at TCS; Honasa's beauty-tech plan
Troubles deepen at TCS; Honasa's beauty-tech plan Want this newsletter delivered to your inbox? Also in the letter: CS to freeze senior hiring, pause annual salary hikes Details: Onboarding of senior hires has been delayed by over 65 days. At the same time, the company has started phasing out hundreds of bench employees across multiple cities as part of a tighter utilisation push. More to come: Also Read: Past tense: Quote, unquote: Also Read: TCS layoffs draw government attention What's next: Union heat: Also Read: Honasa looks beyond beauty and skincare to new growth categories Driving the news: Growth channels: The numbers: Also Read: Sponsor ETtech Top 5 & Morning Dispatch! Why it matters: The opportunity: Reach a highly engaged audience of decision-makers. Boost your brand's visibility among the tech-savvy community. Custom sponsorship options to align with your brand's goals. What's next: Go Digit's first quarter profit climbs 37% to Rs 138 crore Details: Net profit of Rs 138.3 crore compared with Rs 101.3 crore a year earlier. of Rs 138.3 crore compared with Rs 101.3 crore a year earlier. Total income rose 4% to Rs 2,179.4 crore. rose 4% to Rs 2,179.4 crore. Expenses increased 3% to Rs 2,058.5 crore. increased 3% to Rs 2,058.5 crore. Gross written premium , i.e. the total premium collected before accounting for expenses, up 12% year-on-year (YoY) to Rs 2,981.8 crore. , i.e. the total premium collected before accounting for expenses, up 12% year-on-year (YoY) to Rs 2,981.8 crore. Net premium earned at Rs 1,865 crore. Agritech startup DeHaat posts profit in Q1, says founder Revenue in FY25 was at Rs 3,000 crore, up 11% year-on-year CEO Shashank Kumar said DeHaat's annual revenue run rate was at Rs 4,000 crore. He did not provide the profit and revenue figures for the first quarter. Keeping Count Other Top Stories By Our Reporters Wipro plans to open PCB unit facility: Navi Technologies raises Rs 170 crore via debt round: Mobile testing platform Drizz raises $2.7 million: Global Picks We Are Reading Happy Tuesday! After announcing over 12,000 layoffs, TCS now plans to pause senior hiring and annual appraisals. This and more in today's ETtech Morning Dispatch.■ Go Digit's Q1 report■ Wipro's PCB unit facility■ Navi debt raiseK Krithivasan, CEO, TCSDays after announcing plans to lay off 12,000 employees —roughly 2% of its global headcount—Tata Consultancy Services (TCS) is hitting pause on senior-level hiring and freezing annual salary hikes worldwide, according to people familiar with the slowdown is already say TCS's move could trigger a broader industry reset , with other IT majors likely to mirror the cost-control playbook, as they grapple with soft demand and margin far, no peer has announced layoffs at this scale, but the slowdown is real. TCS added just 5,000 employees in Q1 FY26, while rivals like Infosys have eased off 2017, Infosys, Wipro, and Cognizant collectively laid off thousands of employees due to automation concerns and stricter US visas. Later, between 2020 and 2022, companies carried out silent layoffs by extending bench periods and reducing new firm Jefferies said this may be a 'canary in the coal mine' moment for IT services. 'TCS's move to cut 2% of its workforce may lead to execution slippages in the near term and higher attrition in the longer run for the firm and reflects a weak demand environment for the sector,' the report IT Ministry is closely monitoring TCS's decision to cut 12,261 jobs – roughly 2% of its global workforce – as alarm grows over job losses at India's largest tech firm. Government officials are in touch with TCS, seeking clarity on the rationale behind the ministry may push for more aggressive skilling interventions and wants clearer insight into existing talent gaps. TCS, for its part, said it will offer severance packages, counselling support, and outplacement services to affected union Nascent IT Employees Senate (NITES) has urged labour minister Mansukh Mandaviya to halt TCS's plan to axe over 12,000 jobs , calling the move 'illegal' and demanding the reinstatement of affected its letter, NITES accused the IT giant of sidelining over 600 lateral hires and questioned the fairness of the layoffs, pointing to hefty executive pay packets. The union also called on the government to hold senior leadership Alagh and Ghazal Alagh, founders, Honasa ConsumerHonasa Consumer, the parent company of Mamaearth, is looking to expand into new product lines as its once-flagship brand loses company is exploring a range of beauty tech products, including laser masks, LED light therapy devices, facial rollers, and face massagers, sources told us. These high-margin categories, often associated with Korean skincare and haircare routines, are drawing growing interest from both Indian and global is also doubling down on its newer labels, notably The Derma Co. and Dr Sheth's, which are showing strong momentum. On its Q4 FY25 earnings call, CEO Varun Alagh said these younger grands grew over 30% posted operating revenue of Rs 2,067 crore in FY25, though net profit dipped to Rs 73 crore from Rs 111 crore the previous year. With Mamaearth plateauing, the company is not bettting on premiumisation and innovation to drive its next Top 5 and Morning Dispatch are must-reads for India's tech and business leaders, including startup founders, investors, policy makers, industry insiders and Reach out to us at spotlightpartner@ to explore sponsorship Goyal, founder, Go DigitGo Digit General Insurance on Monday reported a nearly 37% rise in net profit for the first quarter on the back of growth in gross written agritech startup DeHaat posted a net profit for the first quarter of fiscal 2026 due to high-margin private label sales and exclusive agri-input distribution, along with increased focus on exports, storage and food Infrastructure Engineering (WIN) announced a new business division , Wipro Electronic Materials, on Monday, focusing on the manufacturing of high-performance materials for Printed Circuit Boards (PCBs).Flipkart cofounder Sachin Bansal's fintech venture Navi Technologies has raised Rs 170 crore through a debt funding round led by PhillipCapital, with NDX Financial Services, Arpee Commercial Company, Ambit Finvest, and Grey Grass India, among others, taking AI mobile app testing platform Drizz has secured $2.7 million in its maiden funding round , led by early-stage venture capital firm Stellaris Venture Partners. The funds will be used to advance the company's vision AI engine, expand its engineering team and strengthen research capabilities.■ From cheating exposés to dating background checks, TikTok detectives are thriving ( Wired ■ The truly worrying thing about the Coldplay concert scandal ( FT ■ BYD distracted the world while Chinese EV peers staged a coup ( Rest of World


Deccan Herald
an hour ago
- Deccan Herald
BEL Q1 net up 24.87% to Rs 969.13 crore
Profit before tax (PBT) during the quarter stood at Rs 1,289.24 crore, with a growth of 24.28% over the same quarter last year when it posted Rs.1,037.34 crore.