Pakistan’s total debt has ballooned to PKR 76,000 billion in just the first nine months of FY 2024–25, as revealed in the recently released Economic Survey.
When the US debt bubble bursts, it will hurt Pakistan more than Washington, a finance expert warned on Monday. Akshat Shrivastava, founder of investment education platform Wisdom Hatch, in a social media post laid out a macroeconomic explanation of why countries like Pakistan are more exposed to global debt risks than the US.
“When US Debt bubble bursts it will hurt Pakistan more, than the US,” Akshat said in a detailed thread explaining how dollar-denominated debt affects vulnerable economies. “Let me explain without sensationalising the topic,” he added, before walking through the mechanics of global debt.
He began with the basics: “Debt bubble bursting means = a debt default. Debt default means = a country is unable to repay its debt. More specifically it defaults on its short-term debt.”
Akshat stressed that most of the world’s debt is held in US dollars — a currency the US itself controls. “Therefore, it can print infinite amount of USD. Printing of this USD, is ‘internal’ debt for the US. US can basically refinance their debt on their own terms. Most other countries do not have this option.”
The key distinction, he noted, is that countries like Pakistan cannot print dollars. “A chunk of its debt is denominated in the US. And, if it defaults on that debt, lenders will come,” Akshat said. “So from time-to-time we have seen Pakistan begging in front of IMF for debt restructuring. Why? Because unlike the US, Pakistan can’t really refinance its debt on its own terms.”
According to him, the issue is structural and extends beyond Pakistan. “From a macro point of view: The more money US prints (i.e more debt it takes), the more the debt on the ‘world’ rises (not just the US). As a result, investors look for safe havens to park their money. And, move their assets to more stable economies.”
He added: “There is flight of money from countries like Pakistan to US/Singapore. Switzerland, US, Singapore are some of the stable economies across the world. Increased debt on the world, hurts these economies less than other average countries.”
Akshat pointed out that the bubble is already under pressure. “So how will debt bubble burst? Well, it is already bursting: and we are seeing countries like Pakistan, Sri Lanka defaulting on their debt. While, the rich from these countries moving to more stable economies.”
His observations come at a time when Pakistan’s total debt has ballooned to PKR 76,000 billion in just the first nine months of FY 2024–25, as revealed in the recently released Economic Survey. Of this, PKR 51,500 billion is owed to local banks, and PKR 24,500 billion is in external debt. Despite efforts at economic stabilisation, Pakistan remains reliant on debt restructuring and IMF support.
Pakistan’s Finance Minister Muhammad Aurangzeb has stated that public debt-to-GDP ratio has dropped slightly from 68% to 65%, while foreign exchange reserves as of 2025 stood at USD 16.64 billion — a recovery from the near-collapse levels of 2023, when Pakistan had only two weeks of import cover left.
