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Pakistan has begun repaying its domestic debt ahead of schedule at a scale not seen before, marking a notable development in the country’s debt management approach.
Adviser to the Finance Minister Khurram Schehzad said that since late 2024, the government has early-retired Rs 3.65 trillion in domestic debt owed to the market and the State Bank of Pakistan (SBP) within a period of about 14 months. The latest payment of Rs 300 billion was made to the central bank on Thursday.
According to the adviser, this marks the first time Pakistan has carried out early domestic debt repayments on such a large scale, a move he described as part of a broader push toward fiscal discipline and improved credibility.
Details shared by the finance ministry show that the repayments were made in phases, including Rs 1 trillion in December 2024, Rs 500 billion in June 2025, Rs 1.16 trillion in August 2025, Rs 200 billion in October 2025, Rs 494 billion in December 2025, and Rs 300 billion in January 2026.
During the current fiscal year alone, from July to January, early repayments crossed Rs 2.15 trillion around 44% higher than the total retired ahead of time in the previous fiscal year.
A significant portion of the repayments targeted debt held by the SBP. Nearly 44% of the central bank’s outstanding debt was retired early, bringing the SBP-held stock down from around Rs 5.5 trillion to close to Rs 3 trillion, including liabilities that were originally due to mature in 2029.
The breakdown shows that about 65% of the early repayments were linked to SBP debt, 30% to treasury bills, and 5% to Pakistan Investment Bonds. Officials say this has helped improve the overall structure of domestic debt.
The adviser also pointed to a modest decline in public debt levels, stating that total public debt fell from over Rs 0.5 trillion in June 2025 to around Rs 80 trillion by November. Pakistan’s debt-to-GDP ratio has also eased to nearly 70% , compared to about 74% in FY2022.
Addressing public debate around per-capita debt figures, the adviser said such comparisons can be misleading, noting that many advanced economies carry high per-person debt but remain stable due to stronger revenues and repayment capacity.
