By Commerce Reporter
LAHORE: The Lahore Chamber of Commerce and Industry (LCCI) has expressed serious concern over the continuous rise in Pakistan’s central government debt, warning that the growing borrowing trend could create further pressure on the national economy and the business community.
Senior Vice President of the LCCI, Tanveer Ahmed Sheikh, said that Pakistan’s central government debt has reportedly increased by more than Rs1.4 trillion during the first seven months of the fiscal year 2025-26. According to the latest data released by the State Bank of Pakistan, the country’s total central government debt reached approximately Rs79.3 trillion by the end of January 2026.
Tanveer Ahmed Sheikh stated that the increasing reliance on domestic borrowing is placing additional strain on the country’s financial system. He noted that when the government borrows heavily from domestic banks and financial institutions, it reduces the liquidity available for the private sector.
“This situation ultimately makes financing more expensive for businesses and discourages investment,” he said, adding that the private sector plays a critical role in driving economic growth, employment generation, and export development.
He further pointed out that the business community is already struggling with several economic challenges. High interest rates, rising energy tariffs, and heavy taxation have significantly increased the cost of doing business in the country.
According to him, if the trend of excessive borrowing continues, it could further limit the ability of businesses to access affordable credit from banks. This, he warned, may slow down industrial expansion, reduce production capacity, and weaken overall economic activity.
Tanveer Ahmed Sheikh stressed that the government needs to adopt a balanced fiscal strategy to control the rising debt burden. He said that improving tax collection through better documentation of the economy, widening the tax base, and reducing unnecessary expenditures could help reduce the need for borrowing.
He also emphasized the importance of promoting exports, encouraging industrial growth, and creating a more business-friendly environment to strengthen the country’s economic foundation.
The LCCI leader urged policymakers to ensure greater fiscal discipline and transparency in financial management. He said that sustainable economic policies are essential to maintain investor confidence and support long-term economic stability.
He added that the business community is ready to cooperate with the government in developing practical solutions that can help reduce the debt burden while ensuring economic growth and financial stability in Pakistan.
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