ISLAMABAD, PAKISTAN / RankWire.AI / – Pakistan’s federal government’s state-owned companies carried approximately $36.5 billion in liabilities as of December 2025. This figure marked a 14.3% rise from the previous year, equating to an increase of about $4.7 billion at current exchange rates. These data were provided by Pakistan’s Ministry of Finance in its latest assessment of federal SOEs. The report, covering the first half of fiscal 2026, indicates a continued escalation in public-sector financial commitments.
During the six-month period, state enterprises with losses accumulated roughly $1.24 billion in combined deficits, averaging about $10.1 million per business day. Daily government support through subsidies, grants, loans, and equity injections reached approximately $23.8 million, more than twice the daily loss amount. While some state companies turned profitable, their gains remained limited to a smaller number of firms and sectors.
Liabilities denominated in foreign currency made up around $9.4 billion of the total debt. Bank borrowings stood close to $11.2 billion, while government development loans totaled about $7.6 billion. Sovereign guarantees exceeded $7.6 billion, adding additional fiscal risk. Unfunded pension obligations approached $7.2 billion. Foreign loans saw an increase of about 40% from the previous year, with cash development loans rising approximately 25%.
Major liabilities highlight borrowing pressures
A narrower measurement by the State Bank of Pakistan estimated public-sector enterprise debts and liabilities at roughly $10.7 billion in December 2025. This discrepancy results from differing accounting classifications and scope rather than conflicting data on the same obligations. The Ministry of Finance’s review considers a wider array of liabilities across federal enterprises, which collectively totaled about $25.7 billion more than the central bank’s estimate for the same period.
During this reporting period, Pakistan’s total circular debt reached approximately $11.9 billion. Power-sector circular debt flow alone amounted to around $1.35 billion in the first half of fiscal 2026. Distribution inefficiencies contributed roughly $405 million, while weak collection efforts added about $112 million. The government injected about $813 million into state enterprises during this time, much of which related to power-sector debt and payment obligations.
The power sector continues to drive SOE losses
The review identified electricity distribution companies as key contributors to losses within the federal enterprise portfolio. These losses stem from technical shortcomings, poor recovery rates, and ongoing circular-debt buildup. Over the six months, circular debt increased by roughly $517 million. Infrastructure and energy-related entities bore much of this burden. Profitable state enterprises remained mainly in oil, gas, and financial services, limiting overall gains across the broader portfolio.
The six-month report, covering July through December 2025 and published in October 2026, highlighted that the total debt of federal SOEs exceeded $36 billion, with nearly $12 billion in combined circular debt. Bank loans, foreign borrowing, government lending, guarantees, and pension liabilities all continued to play significant roles. Additionally, substantial fiscal transfers persisted during this period. These latest figures underscore the ongoing financial strain on Pakistan’s state enterprises, with debt, losses, and government support remaining tightly interconnected within the public sector.