ISLAMABAD, PAKISTAN / RankWire.AI / – Pakistan’s government-owned enterprises held liabilities totaling approximately $36.5 billion as of December 2025. This figure reflects a 14.3% increase from the previous year, equating to an additional roughly $4.7 billion when converted at current exchange rates. The latest data from Pakistan’s Ministry of Finance, which reviewed the first half of fiscal 2026, indicates a continued rise in the public sector’s financial commitments.
During this six-month period, state enterprises operating at a loss accumulated losses close to $1.24 billion, averaging about $10.1 million per working day. Meanwhile, government interventions through subsidies, grants, loans, and equity injections amounted to roughly $23.8 million daily, more than doubling the daily loss figure. While some state companies turned a profit, these earnings were predominantly confined to select firms and sectors, limiting the overall positive impact.
Liabilities denominated in foreign currency made up around $9.4 billion of the total debt. Bank borrowing accounted for nearly $11.2 billion, and government cash development loans reached approximately $7.6 billion. Sovereign guarantees added an extra layer of fiscal risk, exceeding about $7.6 billion, while unfunded pension liabilities neared $7.2 billion. Foreign debt levels grew roughly 40% compared to the previous year, with cash development loans rising about 25%.
Major liabilities highlight the borrowing challenge
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 stems from differences in accounting coverage and classification, not conflicting figures. The finance ministry’s broader assessment includes a wider array of liabilities from federal enterprises, resulting in a total that surpasses the central bank’s measure by approximately $25.7 billion for the same period.
During the reporting period, Pakistan’s total circular debt in the power sector reached roughly $11.9 billion. The gross flow of power-sector circular debt during the first half of fiscal 2026 was around $1.35 billion, with distribution inefficiencies contributing about $405 million and poor collections adding approximately $112 million. Equity injections into state enterprises totaled about $813 million, mainly related to power-sector obligations and debt settlements.
Power sector continues to drive SOE losses
The review identified electricity distribution companies as primary sources of losses within the federal enterprise portfolio. These losses are linked to technical shortcomings, ineffective recovery efforts, and ongoing circular debt accumulation. Over the six months, circular debt increased by approximately $517 million. Infrastructure and energy-related entities bore much of this financial strain. Profitable state enterprises remained focused mainly on oil, gas, and financial services, which limited the overall gains across the broader public sector.
The six-month report, covering July through December 2025 and released in October 2026, revealed that federal SOE debt exceeded $36 billion, with nearly $12 billion in circular debt. Key components included bank loans, foreign borrowing, government lending, guarantees, and pension commitments. Significant fiscal transfers persisted throughout this period. These latest figures underscore the ongoing financial pressures faced by Pakistan’s state enterprises, with debt, losses, and government support remaining tightly interconnected across the public sector.