The total deficit of Pakistan’s government entities surged by 300 percent to Rs 122.9 billion in the fiscal year 2024-25, according to the Federal Cabinet Committee on State-Owned Enterprises.

Officials highlighted growing long-term financial risks, including Rs 9,570 billion in loans and Rs 2,000 billion in unfunded pension liabilities.

The annual comprehensive performance report, presented by the Central Monitoring Unit of the Ministry of Finance, reviewed both commercial and non-commercial government institutions. The report covered financial and non-financial performance, government support, debt levels, governance, audits, and business plans.

During the fiscal year, government entities earned a total income of Rs 12.4 trillion. However, declining global oil prices significantly reduced profits in the energy sector. Overall, the total profit of profit-making institutions fell by 13 percent to Rs 709.9 billion, while losses of loss-making institutions slightly declined by 2 percent to Rs 832.8 billion.

Despite this, the net result across all government entities was a loss of Rs 122.9 billion, marking a 300 percent increase compared to the previous year’s Rs 30.6 billion loss.

Key sectors driving losses

Most losses were concentrated in transport and power distribution, including the National Highway Authority and several power distribution companies. Structural inefficiencies, high financial costs, and the public-service nature of these entities limit profitability.

The Cabinet Committee is categorizing government entities into green, amber, and red categories to prioritize reforms and financial interventions based on sustainability.

Government support

Government support to entities increased to Rs 2,078 billion, primarily through equity injections to reduce circular debt, while subsidies slightly decreased. Conversely, the funds collected from government entities—including taxes, dividends, and interest on loans—totaled Rs 2,119 billion.

Outstanding loans of government entities were reported at Rs 9,570 billion, with unfunded pension liabilities estimated around Rs 2,000 billion, representing major long-term financial risks. Off-balance sheet liabilities and government guarantees amounted to Rs 2,160 billion.

Federal Finance Minister Muhammad Aurangzeb praised the Central Monitoring Unit for enhancing transparency through IFRS-based reporting and digital databases. He emphasized timely audits, full IFRS adoption by February 2026, and strict financial discipline for persistently loss-making entities.

The committee approved the appointment of independent directors for multiple power and energy companies, including Gujranwala Electric Power Company, Jamshoro Power Generation Company, Islamabad Electric Supply Company, and Tribal Areas Electric Supply Company.