Punjab, under Chief Minister Maryam Nawaz, has emerged as Pakistan’s leading borrower, securing a staggering Rs. 405 billion from the State Bank of Pakistan (SBP) in just 38 days (July 1–August 8, 2025) of the fiscal year 2025-26.
This massive borrowing, dwarfing that of Sindh, Khyber Pakhtunkhwa (KP), and Balochistan, comes alongside a historic debt repayment, raising questions about the province’s fiscal strategy and its implications for Pakistan’s economy.
According to SBP data, Punjab’s Rs. 405 billion loan accounts for 87.1% of the total Rs. 465 billion borrowed by all provinces during this period. In comparison:
- Khyber Pakhtunkhwa: Rs. 21 billion (4.5%)
- Sindh: Rs. 16 billion (3.4%)
- Balochistan: Rs. 13 billion (2.8%)
Punjab’s borrowing is approximately 25 times Balochistan’s, 20 times Sindh’s, and 19 times KP’s, reflecting its heavy reliance on central bank financing for initiatives like wheat procurement, subsidies, and the Apna Ghar Apni Chhat housing scheme. Unlike the federal government, restricted by IMF conditions from direct SBP borrowing, provinces face no such limits, enabling Punjab’s financial surge.
To normalize for economic and population differences, per capita borrowing and GDP-relative metrics provide context (based on 2025 population estimates and FY25 GDP data):
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Punjab (~128 million people, ~55% of national GDP): Rs. 3,164 per capita, 0.65% of provincial GDP (~Rs. 62,163 billion).
- Sindh (~56 million, ~25-30% of GDP): Rs. 286 per capita, 0.05-0.06% of GDP (~Rs. 28,000-34,000 billion).
- Khyber Pakhtunkhwa (~41 million, ~10-15% of GDP): Rs. 512 per capita, 0.12-0.19% of GDP (~Rs. 11,000-17,000 billion).
- Balochistan (~15 million, ~5% of GDP): Rs. 867 per capita, 0.23% of GDP (~Rs. 5,700 billion).
Punjab’s high absolute borrowing aligns with its economic size, but its per capita figure is moderate. Balochistan’s higher per capita borrowing reflects reliance on federal transfers due to its smaller economy, while Sindh’s low figures suggest fiscal caution.
Amid this borrowing spree, Punjab cleared a decades-old Rs. 675 billion bank debt tied to wheat procurement and subsidies. The final Rs. 13.8 billion payment to the National Bank of Pakistan eliminated daily interest costs of Rs. 250 million, saving Rs. 500 million monthly. Rejecting bank requests to roll over loans, Punjab officials hailed this as a “landmark achievement” that frees resources for public welfare, including the Apna Ghar Apni Chhat program aimed at affordable housing.
Despite progress, loss-making state-owned enterprises (SOEs) across provinces, with debts exceeding Rs. 2,166 billion, remain a concern. Punjab’s SOEs borrowed an additional Rs. 65 billion from commercial banks to stay afloat, underscoring the need for reforms to address financial inefficiencies.
In FY25, provinces prioritized debt repayment: Balochistan repaid Rs. 8.2 billion, Sindh Rs. 145 billion, and Punjab Rs. 28.5 billion to the SBP. The federal government also reduced its SBP debt by Rs. 55 billion, lowering its total to Rs. 5,269 billion by June 30, 2025. However, FY26’s borrowing surge, particularly in Punjab, follows debt clearance to fund new initiatives. Pakistan’s public debt reached Rs. 76,007 billion by March 2025, with provincial commodity debt at Rs. 1,162 billion.
