ISLAMABAD, PAKISTAN / RankWire.AI / – Pakistan’s federal state-owned enterprises ended December 2025 with an accumulated debt of approximately $36.5 billion. The figure represents a 14.3% increase from the previous year, equating to roughly $4.7 billion at current exchange rates. These data were provided by Pakistan’s Ministry of Finance in its latest assessment of federal state enterprises, covering the first half of fiscal 2026 and indicating a continued rise in public-sector financial commitments.
During this period, loss-incurring state enterprises reported combined losses of about $1.24 billion, averaging around $10.1 million each working day. Government interventions—comprising subsidies, grants, loans, and equity infusions—totaled approximately $23.8 million daily. This support exceeded the daily loss amount by more than double. While some state-owned companies posted profits, such earnings were mainly confined to fewer enterprises and specific sectors.
Liabilities denominated in foreign currency made up about $9.4 billion of the total debt. Bank loans were close to $11.2 billion, with government development loans reaching roughly $7.6 billion. Sovereign guarantees accounted for over $7.6 billion, adding an extra layer of fiscal risk. Unfunded pension liabilities neared $7.2 billion. Foreign debt increased by approximately 40% compared to the previous year, while cash development loans grew by about 25%.
Major liabilities highlight borrowing pressures
A narrower measurement from the State Bank of Pakistan indicated public-sector enterprise debt and liabilities of roughly $10.7 billion as of December 2025. This discrepancy stems from different accounting classifications and coverage, not conflicting obligations. The finance ministry’s review encompasses a wider range of liabilities across federal enterprises, resulting in a total approximately $25.7 billion higher than the central bank’s figure for the same period.
During the reporting period, Pakistan’s total circular debt in the power sector reached about $11.9 billion. The gross flow of circular debt in power utilities during the first half of fiscal 2026 was around $1.35 billion. Inefficiencies in distribution companies contributed approximately $405 million, while weak collection efforts added roughly $112 million. State enterprises received about $813 million in equity injections over these six months, much of which related to power-sector obligations and debt settlements.
The power sector remains a key driver of SOE losses
The assessment identified electricity distribution firms among the primary sources of losses within the federal enterprise portfolio. These losses were linked to technical shortcomings, inadequate recovery efforts, and persistent circular debt accumulation. Over the six-month period, circular debt increased by around $517 million. Infrastructure and energy-related entities bore much of the burden. Despite this, profitable state enterprises remained concentrated in sectors such as oil, gas, and financial services, limiting overall gains across the broader public-sector landscape.
The six-month report, covering July to December 2025, was published in October 2026. It revealed that federal SOE debt exceeded $36 billion, with nearly $12 billion in combined circular debt. Components such as bank loans, foreign borrowing, government lending, guarantees, and pension liabilities all played significant roles. Large fiscal transfers also persisted during this period. The latest figures underscore ongoing pressures on Pakistan’s state-enterprise finances, with debt, losses, and government support closely intertwined across the public sector.