Rs100 trillion in debt: should Pakistan be worried?

Despite alarming headlines that Pakistan's debt has surpassed Rs100 trillion, a deeper analysis reveals a more nuanced and potentially improving situation. The rate of debt accumulation has slowed significantly to 7.7% in FY26, the lowest in two decades, and the debt-to-GDP ratio has reportedly decreased from 88% to 68%. Furthermore, interest payments as a share of government revenue have fallen from 61% to 35%, indicating an improved debt servicing capacity. State Bank foreign exchange reserves have also increased substantially from $3 billion to $18.5 billion, strengthening the country's ability to meet external obligations, though import cover remains below comfortable levels. These indicators suggest a shift towards greater containment and manageability of Pakistan's debt.