Pakistan Needs 14,000 Years to Clear Circular Debt if It Starts Paying Rs. 10 Lac Daily

Pakistan’s circular debt in the power and gas sector has reached Rs 5.1 trillion, an expense so big it can take many years to be paid in full.

At this level, the debt burden is so large that even if Pakistan were to repay it at a rate of Rs. 1 million per day, clearing Rs. 5.1 trillion would still take 13,972 years.

The National Assembly Standing Committee on Finance was informed this week that the debt had risen sharply from around Rs 3.5 trillion last year.

Lawmakers were briefed that despite signs of macroeconomic stabilization, Pakistan remains under pressure from rising debt, inflation, and fiscal imbalances. External debt has also climbed to $137.56 billion.

The committee reviewed the economic outlook for FY2026–27, including IMF program conditions, revenue performance, and budget priorities.

Members expressed concern over the government’s continued reliance on indirect taxation and petroleum levies instead of expanding the direct tax base. They warned that this approach is increasing pressure on consumers.

Inflation has returned to double digits, reaching 10.9 percent in April 2026, while growth projections remain moderate at 3.5 to 4.5 percent for the next fiscal year.

The circular debt crisis was identified as one of the most persistent risks to Pakistan’s stability.

Lawmakers urged the government to accelerate structural reforms in the energy sector, improve governance in state-owned enterprises, and reduce dependence on short-term fiscal measures to avoid further debt accumulation.