Sindh's Foreign Debt Rises 49% in Two Years, Fastest Growth Among Provinces

Sindh recorded the sharpest increase in foreign debt among Pakistan's provinces over the past two years, with its outstanding loans rising by $1.839 billion, or nearly 49 percent, according to a Ministry of Finance document. The province's foreign debt stood at $3.777 billion in June 2024 and climbed to $5.616 billion by June 2026.

Punjab remains the most indebted province in absolute terms, with outstanding foreign loans of $6.402 billion as of June 2026, up from $6.026 billion two years earlier. That represents a much slower growth rate of about 6 percent, or an addition of $376 million, highlighting a clear divergence in borrowing trends between the two largest provinces.

Khyber Pakhtunkhwa ranked second in percentage growth, adding $595 million to take its foreign debt from $2.378 billion to $2.973 billion, an increase of roughly 25 percent. Smaller regions saw comparatively modest changes: Balochistan's debt rose by $33 million to $390 million, while Gilgit-Baltistan's increased by $7 million to $69 million.

Azad Jammu and Kashmir was the only region to reduce its foreign obligations, with its debt falling by $29 million from $209 million to $180 million over the same period. Collectively, the foreign debt of provincial governments grew by $2.821 billion to reach $15.63 billion by June 2026.

Sindh accounted for approximately 65 percent of the total increase in provincial foreign debt nationwide. Its share of the combined provincial debt stock rose from about 30 percent to roughly 36 percent, narrowing the gap with Punjab to less than $800 million.

The data points to a shifting debt profile among the provinces, with Sindh's accelerated borrowing potentially raising questions about the purposes and repayment terms of its external obligations in the years ahead.