Pakistan Boosts Defence Spending By 20% Amid Record Debt And Economic Woes

Last Updated:June 10, 2025, 19:08 IST

The PKR 2.55 trillion defense allocation is the largest budget outlay after interest payments, which account for a massive PKR 8207 billion.

Pakistani Prime Minister Shehbaz Sharif | File Image

Pakistan is set to boost its defence spending by nearly 20% in its annual budget for fiscal year 2025-26, allocating PKR 2550 billion for its military. This significant increase, the highest in recent years, comes as the nation grapples with its highest-ever public debt, potentially raising concerns about the utilization of international aid.

Defence Budget Surges Amid Record Debt

The PKR 2550 billion defense allocation is the largest budget outlay after interest payments, which account for a massive PKR 8207 billion. This substantial rise in military spending follows Operation Sindoor- a significant military response undertaken by India targeting terrorist infrastructure in Pakistan and Pakistan-occupied Jammu and Kashmir following Pahalgam attack- and comes even as Pakistan’s overall debt burden reached unprecedented levels. According to Pakistan’s Economic Survey, the total Public Debt of Pakistan, ending March 2025, hit PKR 76007 billion- its highest-ever mark. This figure has doubled in the last four years and increased fivefold over the past decade. India could cite this significant defense increase to question if International Monetary Fund (IMF) aid to Pakistan is being used to arm itself against India.

Pakistan’s Economic Survey Paints Grim Picture

Pakistan’s Economic Survey highlighted a concerning situation in Pakistan’s agriculture sector, which is currently in dire straits. Growth in this vital sector plummeted from 6.4% to just 0.56% in the previous financial year. The outlook for the current year could worsen further due to anticipated water shortages in the Indus Water basin.

Senator Appears To Acknowledge Pakistan’s Past Terror Links

These economic challenges unfold as a senior Pakistani official appeared to indirectly acknowledge the country’s troubled past with terror groups. During an exchange with Sky News journalist Yalda Hakim, Pakistan People’s Party Senator Sherry Rehman appeared to hint at long-standing concerns about state links to organizations operating within Pakistan’s borders.

The interview, which initially touched on Pakistan’s recent removal from the Financial Action Task Force (FATF) grey list, took a sharp turn when the conversation shifted to the country’s historical record on terrorism and alleged complicity in harboring extremist elements.

Responding to questions about Pakistan’s past, Sherry Rehman said, “You keep on talking about the past… because it was." She added, “We are fighting terrorism… Pakistan is a changed country now."

When pressed further on Pakistan’s past tolerance of terrorism, specifically highlighting that Sajid Mir, a key plotter of the 26/11 Mumbai attacks, was only arrested after years of official denial about his presence in the country, Sherry Rehman said, “You’re citing a long history of engaging with terrorism one way or the other… either fighting it or otherwise."

Aman Sharma

Aman Sharma, Executive Editor - National Affairs at CNN-News18, and Bureau Chief at News18 in Delhi, has over two decades of experience in covering the wide spectrum of politics and the Prime Minister’s Office....Read More

Aman Sharma, Executive Editor - National Affairs at CNN-News18, and Bureau Chief at News18 in Delhi, has over two decades of experience in covering the wide spectrum of politics and the Prime Minister’s Office....

Read More

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News world Pakistan Boosts Defence Spending By 20% Amid Record Debt And Economic Woes