BMP Warns Rising Public Debt Threatens Economic Stability

By Muhammad Shahzad | Lahore, Pakistan
LAHORE: The Federation of Pakistan Chambers of Commerce and Industry’s Businessmen Panel (BMP) has raised serious concerns over Pakistan’s mounting public debt, warning that the country is sliding deeper into a debt trap that could undermine economic stability, business confidence, and long-term growth.
Former FPCCI President and BMP Chairman Mian Anjum Nisar said the latest figures showing public debt surpassing the statutory limit by nearly Rs 17 trillion should serve as a wake-up call for policymakers. He stressed that short-term fixes and cosmetic adjustments can no longer address Pakistan’s structural economic weaknesses.
Mian Anjum Nisar criticized continued violations of the Fiscal Responsibility and Debt Limitation Act, noting that a debt-to-GDP ratio exceeding 70% is unsustainable and undermines fiscal credibility. “When nearly half of the annual budget is consumed by debt servicing, little is left for development, infrastructure, health, or education. This creates a vicious cycle where low growth drives more borrowing, further suppressing growth,” he said.
He further highlighted that repeated assurances of fiscal consolidation have failed to materialize. Despite efforts to extend loan maturities, total debt continues to climb, reflecting the government’s inability to control deficits or expand revenue through genuine economic growth.
Nisar was particularly critical of the Federal Board of Revenue, saying persistent failure to meet tax targets highlights systemic flaws. He noted that taxation disproportionately burdens documented businesses and salaried classes, while large segments of the economy remain untaxed. “Slowing refunds, reliance on advance taxes, and one-off court gains cannot replace a broad-based, efficient tax system,” he said.
Warning that weak revenue growth combined with rising expenditures and high debt servicing costs could push Pakistan toward prolonged stagnation, Nisar said businesses are already under pressure due to high energy prices, elevated interest rates, and regulatory uncertainty. Without decisive reforms, he cautioned, Pakistan risks losing remaining competitiveness in regional and global markets.
For a way forward, Nisar stressed the urgent need for Pakistan to shift toward high, sustainable, and export-led growth. Debt reduction, he said, is achievable only through broadening the economic base, boosting exports, supporting industrialization, and enabling small and medium enterprises—the largest sources of employment and innovation.
He called for rationalized energy tariffs, lower policy rates to stimulate private-sector credit, and comprehensive tax reforms aimed at widening the tax base rather than increasing rates on existing taxpayers. Simplified procedures and incentives should bring wholesale, retail, real estate, and agriculture sectors into the documented economy.
Nisar also emphasized governance and institutional reforms, particularly restructuring loss-making state-owned enterprises to reduce fiscal pressure. He stressed the need for investor-friendly policies, political stability, policy continuity, and efficient dispute resolution mechanisms. Long-term industrial policies focusing on value addition, technology adoption, and workforce skills were also recommended.
He concluded: “Pakistan still has the potential to recover from this crisis, but urgent, decisive action is required. Continued reliance on borrowing without structural reforms will only deepen the problem. BMP stands ready to work with the government on a national revival plan, but only meaningful reform—not rhetoric—can achieve debt sustainability, high growth, and economic resilience.”