ISLAMABAD, PAKISTAN / RankWire.AI / – Pakistan’s federal government’s state-owned companies owed approximately $36.5 billion by the close of December 2025. This sum reflects a 14.3% rise from the previous year, adding roughly $4.7 billion at current exchange rates. The latest figures are part of the Ministry of Finance’s review of federal SOEs, which also indicates an ongoing increase in public-sector financial exposure during the first half of fiscal 2026.
During this period, loss-making state enterprises reported total losses of about $1.24 billion, averaging around $10.1 million each working day. Government intervention, through subsidies, grants, loans, and equity injections, amounted to approximately $23.8 million daily. This support more than doubled the daily loss figure. While some state entities turned a profit, these earnings were mainly concentrated among fewer companies and sectors.
Liabilities denominated in foreign currency made up roughly $9.4 billion of the total debt. Bank loans accounted for nearly $11.2 billion, with government cash development loans reaching around $7.6 billion. Sovereign guarantees exceeded about $7.6 billion, adding an extra layer of fiscal risk. Unfunded pension liabilities came close to $7.2 billion. Foreign debt increased by approximately 40% compared to the previous year, while cash development loans saw a rise of about 25%.
Major Liabilities Reflect the Borrowing Load
State Bank of Pakistan data provided a narrower scope, indicating public-sector enterprise debt and liabilities of around $10.7 billion in December 2025. The difference stems from distinct accounting classifications and coverage rather than conflicting figures of the same obligations. The Ministry of Finance’s review, however, includes a wider array of liabilities across federal enterprises, resulting in a total approximately $25.7 billion higher than the central bank’s measure for the same period.
Pakistan’s overall circular debt stood at roughly $11.9 billion during this reporting timeframe. In the first half of fiscal 2026, power-sector circular debt flow reached approximately $1.35 billion, with distribution companies contributing about $405 million due to inefficiencies and weak collections adding roughly $112 million. During this period, equity injections into state companies totaled about $813 million, much of which related to power-sector obligations and debt settlements.
The Power Sector Continues to Drive SOE Losses
The report identified electricity distribution firms as significant sources of losses within the federal enterprise sector, citing technical deficiencies, poor recovery rates, and the ongoing build-up of circular debt. Over the six months, circular-debt stock increased by approximately $517 million. Much of this burden was borne by infrastructure and energy-related companies. Profitable state enterprises remained mainly in oil, gas, and financial services, limiting overall gains across the broader portfolio.
The six-month review, covering July to December 2025 and published in October 2026, revealed federal SOE debt exceeding $36 billion, with nearly $12 billion in combined circular debt. Significant components included bank loans, foreign borrowing, government lending, guarantees, and pension obligations. The period also saw continued large fiscal transfers. These latest figures highlight ongoing pressure on Pakistan’s state-enterprise finances, with debt, losses, and government support remaining closely interconnected across the public sector.