Pakistan, which is struggling with heavy debt and economic instability, has decided to increase defense spending by 20% in the budget of 2025-26. With this increase, the defense budget will exceed Rs 2,500 billion. This decision has been taken at a time when the country’s public debt has reached a record of Rs 76,007 billion, which has almost doubled in the last four years. According to the Economic Survey, Pakistan’s domestic debt is Rs 51,518 billion and foreign debt is Rs 24,489 billion.
Pakistan’s economy is facing a serious crisis. The World Bank report said that 2.6% of the economic growth of 2.6% is insufficient to reduce poverty. In 2024-25, 19 lakh people went below the poverty line. Despite this, the government has given priority to defense spending, which economists have declared wrong priority. Defense spending is the second largest expense after repaying debt. 9,700 billion rupees have been allocated to repay the loan this year.
This increase has come amid increasing tension with India, especially after the April 22 terrorist attack. In response to this, India took steps such as suspending the Indus Waters Treaty, closing the attic border and reducing diplomatic relations. In response, Pakistan shut down airspace for Indian airlines and suspended trade.
Economists have warned that this step can harm social expenses and economic reforms. Report of News18. Muktik, Dr. Kaiser Bengali said, “The use of funds in Dyam-Bhasha Dam such as defense and big projects will increase the burden on common Pakistanis.” The country’s debt-to-GDP ratio is close to 70%, and the foreign exchange reserves cover only three months of imports.
