Pakistan's debt servicing (interest payments) compared against the defence budget, FY2010-11 to FY2026-27 — when one overtook the other, and by how much.
Source: Budget in Brief, each fiscal year's own Budget Estimate.
Key Finding
▸Debt servicing first exceeded defence spending in FY2011-12 (Rs 791bn vs Rs 495bn) and has remained larger every year since through FY2026-27.
For most of Pakistan's history, defence spending was the government's single biggest expense. That has changed. In recent budgets, debt servicing — the interest paid on government loans — has grown to become larger than the entire defence budget.
This is not because defence spending has shrunk. It has actually kept growing every year. Debt servicing has simply grown faster. The government has borrowed more money over time to cover its fiscal deficit — spending more than it collects — and a weaker Rupee makes foreign loans cost more to repay.
Why does this matter for ordinary people? Because money spent on interest payments cannot be spent on anything else — not schools, not hospitals, not new roads. When one expense grows faster than the whole budget, every other category gets squeezed. This shift is one of the clearest signs of how much pressure Pakistan's growing debt is putting on the government's finances.
Is debt servicing really bigger than defence spending now?
Yes — since debt servicing (interest payments on public debt) first overtook defence spending, it has remained the larger of the two in every subsequent Budget Estimate in this dataset.
Why did debt servicing overtake defence?
A growing debt stock, persistently high domestic interest rates, and Rupee depreciation (which raises the local-currency cost of servicing foreign debt) pushed interest payments up faster than defence spending grew.
Are these directly comparable figures?
Yes — both are Budget Estimate figures from the same Table 1 ("Budget at a Glance") of each year's official Budget in Brief, using the same economic classification.
When did debt servicing first overtake defence spending?
Check the Key Finding panel above this FAQ — it states the exact fiscal year this dataset shows the crossover happening, computed directly from the underlying figures, not from a fixed assumption.
Could defence spending overtake debt servicing again?
It's possible, if the government managed to sharply reduce its debt stock or interest rates fell significantly — but given Pakistan's current debt levels, most economists expect debt servicing to stay the larger of the two for the foreseeable future.
Does this comparison include provincial defence-related spending?
No — defence is a purely federal subject in Pakistan, so this comparison only involves federal figures on both sides, with no provincial spending involved.
Is Pakistan unusual in spending more on debt than defence?
No — many heavily indebted countries reach a point where interest costs exceed defence spending. It's a common warning sign that debt-servicing costs are crowding out other government priorities.
What would it take to bring debt servicing back below defence spending?
Realistically, a combination of smaller fiscal deficits over several years, lower domestic interest rates, and a more stable Rupee — none of which tend to happen quickly.
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