TIMES REPORT
ISLAMABAD: Pakistan’s central government debt recorded its slowest annual growth in at least 15 years during the current fiscal year, reflecting the impact of ongoing fiscal reforms, according to a statement shared by Finance Minister’s Adviser Khurram Shahzad on X.
Citing State Bank of Pakistan data, the statement said central government debt grew by just 5 percent this fiscal year, compared with 23 percent in FY2023. It added that the slowdown reflects the government’s strategy to improve debt management and reduce borrowing costs.
The statement clarified that reports claiming Pakistan’s debt has reached Rs97–100 trillion combine central government debt with broader liabilities. It said central government debt currently stands at approximately Rs81.9 trillion, while the country’s debt-to-GDP ratio has declined from around 76 percent in FY2020 to about 68 percent in FY2026.
According to the statement, external debt has also fallen from 28 percent to nearly 21 percent of GDP, while the average maturity of domestic debt has increased from 2.8 years to 3.8 years, reducing refinancing risks.
The government also reported retiring Rs4.7 trillion in expensive debt and reducing annual interest payments by nearly Rs2 trillion, creating additional fiscal space for development spending.
The statement further highlighted improvements in Pakistan’s external sector, including higher foreign exchange reserves, two consecutive years of current account surpluses, and three straight years of primary fiscal surpluses, describing these developments as signs of improving debt sustainability and economic stability.
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