ISLAMABAD, PAKISTAN / RankWire.AI / – Pakistan’s federal government’s state-owned companies owed approximately $36.5 billion at the close of December 2025. This total reflects a 14.3% increase from the previous year, equating to roughly $4.7 billion in current exchange rates. The latest data from Pakistan’s Ministry of Finance, which analyzed the first half of fiscal 2026, indicates a continued rise in public-sector financial commitments.
During this six-month period, loss-making state enterprises accumulated around $1.24 billion in combined deficits, averaging about $10.1 million daily. Government interventions through subsidies, grants, loans, and equity infusions amounted to roughly $23.8 million each day, which more than doubled the daily loss figure. While some state companies turned a profit, these gains were mostly limited to fewer enterprises and specific sectors.
Liabilities denominated in foreign currency made up about $9.4 billion of the overall debt. Bank loans stood at nearly $11.2 billion, with government cash development loans reaching approximately $7.6 billion. Sovereign guarantees accounted for over $7.6 billion, adding additional fiscal exposure. Unfunded pension liabilities neared $7.2 billion. Foreign debt increased by approximately 40% compared to the previous year, and cash development loans rose by around 25%.
Major liabilities reflect the borrowing burden
A more limited measure from the State Bank of Pakistan indicated that public-sector enterprise debt and liabilities totaled about $10.7 billion in December 2025. This discrepancy arises from differences in accounting coverage and classifications, not conflicting measurements of 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 above the central bank’s figure for the same period.
Pakistan’s combined circular debt reached approximately $11.9 billion during the reporting window. Power-sector circular debt flow in the first half of fiscal 2026 was around $1.35 billion. Inefficiencies within distribution companies contributed about $405 million, while weak revenue collection added roughly $112 million. During this period, equity injections into state enterprises amounted to approximately $813 million, much of which related to payments linked to power-sector obligations and debt settlements.
The power sector remains a primary source of SOE losses
The report identified electricity distribution companies as significant contributors to losses across the federal enterprise portfolio. These losses stemmed from technical deficiencies, poor recovery rates, and ongoing circular-debt buildup. Over the six months, circular debt increased by about $517 million. Infrastructure and energy entities bore much of this burden, while profitable state companies were mainly concentrated in oil, gas, and financial services, limiting overall gains.
The six-month review, covering July through December 2025, was published in October 2026. It revealed that federal SOE debt surpassed $36 billion, with nearly $12 billion in total circular debt. Bank loans, foreign borrowing, government lending, guarantees, and pension liabilities all remained substantial. The period also saw ongoing large fiscal transfers. These latest figures highlight the persistent strain on Pakistan’s state-enterprise finances, with debt, losses, and government support remaining closely interconnected across the public sector.