PESHAWAR – Khyber Pakhtunkhwa’s debt has surged by Rs 43.59 billion over the past year, reaching a projected total of Rs 723.13 billion by July 1, 2025. According to official figures, the province began the current fiscal year with Rs 679.54 billion in debt.
Interestingly, KP remains free from domestic borrowing. The entire debt burden stems from external loans, with international financial institutions being the primary lenders. This increase reflects the province’s growing reliance on foreign funding for development and budgetary support.
Despite the mounting debt, the KP government has managed to repay Rs 30.70 billion this fiscal year. While the original repayment plan targeted Rs 67 billion, revised estimates show that the actual payment reached Rs 55 billion—Rs 35 billion for principal and Rs 20 billion for interest.
Looking ahead, the provincial government plans to repay Rs 65 billion in the upcoming fiscal year. This includes Rs 40 billion toward the principal amount and Rs 25 billion as interest payments, as part of ongoing debt management efforts.
The largest chunk of the debt is owed to major global lenders. KP owes Rs 323.63 billion to the Asian Development Bank (ADB) and Rs 307 billion to the International Development Association (IDA), with the remaining loans coming from other international institutions.
Khyber Pakhtunkhwa’s debt has more than doubled in just four years. From Rs 295.96 billion in 2021, it rose to Rs 359.33 billion in 2022, jumped to Rs 530.72 billion in 2023, and now stands at Rs 723.13 billion—raising concerns about long-term financial sustainability.