Pakistan’s state‑owned enterprises (SOEs) have recorded a staggering 302% increase in their combined net losses in FY2024‑25, with losses reaching Rs122.9 billion, up from Rs30.6 billion the previous year, according to the Finance Ministry’s report presented to the Cabinet Committee on State‑Owned Enterprises. This surge in losses highlights the ongoing financial troubles of state firms, which are struggling under the weight of circular debt and inefficiencies in key sectors.
The report indicated that SOEs’ revenues decreased by approximately Rs1.4 trillion, totaling Rs12.4 trillion in FY2024‑25, largely driven by a reduction in profits within the oil sector, as well as operational challenges in the power and transport sectors. The sharp decline in oil prices on international markets contributed to the diminishing profits of major oil and gas companies under state ownership.
The state’s intervention to support loss‑making enterprises also increased significantly, with financial aid rising to Rs2.1 trillion in FY2024‑25, up from Rs1.5 trillion in the prior year. Much of this support went into clearing outstanding circular debt. Meanwhile, total debt and contingent liabilities of SOEs reached Rs11.73 trillion, of which Rs9.57 trillion comprised of  cash development loans, foreign re‑lent loans, bank borrowings, and accrued interest, while the remaining Rs2.16 trillion included guarantees and off-balance-sheet obligations.
The report also highlighted a significant unfunded pension liability of about Rs2 trillion across SOEs and noted that major losses were concentrated in transport and power distribution companies, with National Highway Authority being one of the major contributors.
The report also underlined the critical issue of unfunded pension liabilities, amounting to Rs2 trillion across the sector, which continues to burden SOEs’ finances. The government is exploring measures for governance reform and debt rationalization, alongside a push to implement the SOEs Act, 2023.
