Pakistan’s Public Debt Surges Sharply, NA Told Daily Liabilities Rose by Rs25.4 Billion

Pakistan’s public debt has witnessed a major spike, with fresh official data revealing a Rs9.3 trillion increase in FY25 averaging Rs25.4 billion per day. Finance Minister Muhammad Aurangzeb briefed the National Assembly that the country’s total public debt has now reached Rs80.5 trillion, highlighting rising fiscal pressures and a higher debt-to-GDP ratio.

Pakistan has struggled with heavy borrowing for years due to budget deficits, interest payments, and external financing needs. Fiscal tightening measures introduced during the IMF program aimed to stabilise the trajectory yet debt continues to expand.

In his written reply, Finance Minister Aurangzeb stated that under the FRDLA definition, the annual debt rise was Rs8.2 trillion, bringing the debt-to-GDP ratio to 70.8%.
He said:

“The government has achieved primary surpluses for two consecutive years and shifted towards longer-term borrowing to reduce rollover risks.”

Key measures highlighted:

• Pakistan carried out its first-ever sovereign debt buybacks, retiring Rs1.5 trillion in FY25.
• Another Rs1.1 trillion repurchase is planned for FY26.
• Average maturity of domestic debt increased from 2.8 to 3.8 years, saving Rs880 billion in interest.

SBP Data Shows Early Improvement in FY26

State Bank numbers indicate a Rs1.283 trillion decline in central government debt in Q1 FY26, driven by strong SBP profit transfers worth Rs2.4 trillion last year.

Debt Breakdown (End of Sep 2025):

• Total central government debt: Rs76.605 trillion (down from Rs77.888 trillion)
• Domestic debt: Rs53.424 trillion (↓ Rs1.048 trillion)
• Long-term debt: Rs44.961 trillion (↓ Rs692 billion)
• Short-term debt: Rs8.4 trillion (↓ Rs356 billion)
• External public debt: Rs23.181 trillion (↓ Rs236 billion)

Analysts called the Q1 improvement “a positive sign,” noting easing interest payment pressure and better debt management.

CPEC & Development Updates

Planning Minister Ahsan Iqbal informed Parliament that:

• 8 CPEC projects worth USD 759.56 million are under implementation.
• 43 projects worth USD 24.7 billion have been completed.
• Five PSDP scholarship projects costing Rs54.7 billion are underway, with Rs5.5 billion allocated this fiscal year.

Pakistan’s debt story reflects both ongoing risks and early signs of stabilisation largely dependent on fiscal discipline, growth recovery, and continued reforms.