Punjab Trims Its Debt in 6 Months but Still Remains Pakistan’s Biggest Borrower

Punjab was the only province to reduce its external debt but still remained the country’s biggest borrower during the first half of the current fiscal year. All other provinces recorded an increase in foreign liabilities, according to the Ministry of Finance.

The data covers the period from July to December 2025 and shows widening differences in provincial debt management across the country, reported Geo News.

According to the Finance Ministry, Punjab’s external debt declined by $31 million during the six-month period.

Foreign debt levels rose in the remaining provinces:

• Sindh recorded the largest increase, with external debt rising by $494 million.
• Khyber Pakhtunkhwa saw an increase of $93 million.
• Balochistan’s external debt grew by $0.4 million.

The document further revealed that external debt liabilities decreased in the federally administered regions:

• Azad Jammu and Kashmir recorded a reduction of $0.4 million.
• Gilgit-Baltistan posted a decline of $0.1 million.

Despite the recent reduction, Punjab still holds the largest overall volume of external debt among all provinces, making it the biggest provincial borrower in absolute terms.