Pakistan’s total government debt stock climbed to a record level of nearly Rs84 trillion by the end of June 2026, highlighting the growing financial burden facing the country amid continued reliance on domestic and external borrowing. According to the latest data released by the State Bank of Pakistan (SBP), the federal government’s total debt increased by 7.4% on a year-on-year basis during the fiscal year ended June 2026. The central government’s debt stood at Rs83,642 billion in June 2026, compared with Rs77,888 billion recorded in June 2025. The debt stock also increased significantly on a monthly basis, rising from Rs81,955 billion in May 2026. The latest figures indicate that the government’s debt increased by around Rs5,754 billion, or Rs5.75 trillion, over the course of the fiscal year. Domestic debt remains major component Domestic borrowing accounted for the largest portion of the government’s total debt. According to SBP data, the federal government’s domestic debt rose by 9.1% year-on-year to Rs59,441 billion by June 2026. The increase reflects continued dependence on the domestic financial market to meet the government’s financing requirements, including budgetary needs and debt-servicing obligations. Meanwhile, the federal government’s external debt increased by 3.3% during the year, reaching Rs24,201 billion by June 2026. Although the growth in external debt remained comparatively lower than domestic borrowing, the foreign-currency component continues to place pressure on the country’s external financing position, particularly when debt repayments coincide with periods of weak foreign exchange inflows. Debt servicing poses growing challenge The continued rise in the debt stock is also raising concerns about the government’s ability to manage debt-servicing costs while creating fiscal space for development spending and public services. A growing share of government revenues is required to meet interest and principal repayment obligations, limiting the resources available for infrastructure, social development and other productive investments. Economic experts have warned that if the debt trajectory is not brought under control, the rising burden could turn into a “debt trap” for the economy. They argue that reducing dependence on borrowing would require stronger revenue mobilisation, greater fiscal discipline, higher exports and sustained economic growth. Improving the efficiency of public spending and reducing reliance on debt-financed expenditures could also help contain the pressure.

ISLAMABAD: Pakistan and Malaysia have agreed to deepen cooperation in security and law enforcement, with particular emphasis on intelligence sharing, counter-terrorism, drug trafficking, human smuggling and other transnational crimes. The understanding was reached during a meeting between Federal Interior Minister Mohsin Naqvi and Malaysian Minister of Home Affairs Saifuddin Nasution Ismail in Islamabad on Saturday. The two sides reviewed a range of issues related to bilateral security cooperation and agreed to strengthen institutional coordination between the relevant agencies of both countries. During the meeting, the ministers discussed ways to develop more effective mechanisms for exchanging intelligence and coordinating efforts against terrorist networks, narcotics trafficking and human trafficking. They also agreed to enhance cooperation aimed at preventing illegal immigration and tackling cybercrime, which has emerged as a growing challenge for law enforcement agencies worldwide. The two countries also discussed expanding collaboration in the fields of coast guard operations and professional training. Pakistan expressed interest in learning from Malaysia’s experience in strengthening maritime security and developing the capabilities of its coast guard institutions. A key outcome of the meeting was an agreement to improve cooperation between Pakistan’s National Police Academy and the Royal Malaysia Police College. The initiative is expected to facilitate the exchange of expertise, training programmes and professional experiences between law enforcement personnel from the two countries. The ministers also agreed that a high-level Pakistani delegation would visit Malaysia in the near future. The proposed visit is expected to provide an opportunity to advance discussions on bilateral security cooperation and explore new areas of collaboration between the two countries. Naqvi said Pakistan attached great importance to its relations with Malaysia and was keen to further expand cooperation in areas of mutual interest. He said Malaysia’s experience in the Coast Guard sector could provide valuable lessons for Pakistan and expressed confidence that the Malaysian minister’s visit would help take bilateral relations to a new level. The interior minister also highlighted the potential for increasing people-to-people contacts between Pakistan and Malaysia. He described Malaysia as one of the rapidly developing Muslim-majority countries and an attractive destination for Pakistani tourists. Naqvi stressed the importance of facilitating legitimate travel between the two countries, saying that an increase in employment opportunities and work quotas for Pakistanis in Malaysia could encourage more people to use legal channels for travelling and working abroad. Tourism promotion and the facilitation of visa procedures also formed part of the discussions. Both sides emphasized the need to make travel easier while ensuring that immigration systems remain secure and effective. The meeting comes as Pakistan and Malaysia seek to broaden cooperation beyond traditional diplomatic and economic ties, particularly in dealing with security challenges that increasingly cross national borders. Officials from Pakistan’s Interior Ministry and law enforcement institutions also attended the meeting. Participants included State Minister for Interior Talal Chaudhry, the Interior Secretary, Director General of the Federal Investigation Agency (FIA), Inspector General of the Federal Constabulary (FC), the National Coordinator of the National Counter Terrorism Authority (NACTA), and other senior officials. The two countries are expected to continue consultations through their respective institutions, with the planned Pakistani delegation’s visit to Malaysia likely to provide further momentum to cooperation in counter-terrorism, law enforcement, immigration and maritime security.