Punjab remains Pakistan’s biggest provincial borrower despite managing to reduce part of its foreign debt during the first half of the current fiscal year, according to official figures released by the Ministry of Finance.

The data, covering July to December 2025, shows sharply different borrowing trends among the provinces, with most regions adding new external liabilities while only a few recorded reductions.

Punjab was the sole province to post a meaningful decline in foreign debt, trimming its external obligations by $31 million during the six-month period. However, the reduction was not enough to dislodge it from the top position, as the province still holds the largest overall stock of external loans in Pakistan.

Meanwhile, Sindh emerged as the second-largest contributor to rising provincial debt. Its external borrowing jumped by $494 million in just six months — the biggest increase recorded among all provinces.

Khyber Pakhtunkhwa also expanded its foreign liabilities, adding $93 million, while Balochistan’s external debt edged up by $0.4 million.

Outside the provinces, some regions showed limited improvement. External debt declined slightly in Azad Jammu and Kashmir, which reduced obligations by $0.4 million, while Gilgit-Baltistan recorded a modest decrease of $0.1 million.

The latest figures highlight a widening fiscal gap between provinces, where efforts to slow borrowing remain uneven. While Punjab managed to cut back marginally, the broader provincial trend continues to point toward increasing reliance on external financing.