PESHAWAR: The financial burden of debt on the Khyber Pakhtunkhwa (KP) government has been increasing rapidly, with total liabilities projected to rise significantly in the coming fiscal year, official figures indicate.
According to budget estimates, the total external debts of the province stand at Rs855.77 billion and would exceed Rs950 billion in the coming fiscal year.
The provincial government has made provision for repayment of Rs 71 billion in the upcoming budget against the debt, which includes both the repayment of the loan and payment of interest.
According to officials, Rs45 billion out of Rs71 billion would be spent on paying back the principal amount of the loan and Rs26 billion would be paid against the interest charges.
According to the debt portfolio of the provincial government, the maximum debt of Rs380.35 billion is owed to the World Bank, followed by the Asian Development Bank with the second largest debt of Rs361.50 billion.
The list of major creditors also includes Germany with Rs42.53 billion, Japan with more than Rs36.84 billion, the French development agency with Rs21.11 billion, and some other institutions with Rs13.31 billion.
Financial analysts say rising debt servicing obligations could place additional pressure on the province’s development budget, potentially limiting fiscal space for new projects and public services.
The government has not yet issued an official response to concerns over the increasing debt trajectory.
