Pakistan’s Central Government Debt Rises 7.9% Year on Year to 82.66 Trillion Rupees
Key Facts
Pakistan’s total central government debt stood at 82.66 trillion rupees in September 2026, up 7.9% year on year, according to State Bank of Pakistan data cited by Mettis Global. That compares with a balance of 76.61 trillion rupees in September 2025. Month on month, total debt fell 0.3% from 82.91 trillion rupees in August 2026. The comparison shows that the decline recorded during the month did not erase the annual increase in the balance. The report comes as the government moves to manage its mix of domestic and external financing under its borrowing plan for fiscal year 2027.
Domestic debt remained the largest component of total central government debt, at 57.76 trillion rupees in September, according to the breakdown reported by Mettis Global, citing central bank data. The balance included 47.92 trillion rupees of long-term debt and 9.77 trillion rupees of short-term debt, as well as 76 billion rupees through Naya Pakistan Certificates. Domestic debt rose 8.11% year on year but fell 1.62% from the previous month. These figures put the monthly movement in a broader context: the domestic balance declined from August but remained above its level a year earlier. The bank’s breakdown describes debt balances and their components, while the upcoming borrowing plan focuses on financing maturities and instruments.
In its annual review for fiscal year 2026, the Ministry of Finance said total public debt rose 7.7% to 86,715 billion rupees at the end of June, compared with growth of 13% in the previous fiscal year. The public-debt-to-GDP ratio fell to 68.3% from 70.6% at the end of June 2025. The ministry attributed the slower growth in debt to a federal primary surplus of 2,185 billion rupees, a 22% reduction in interest expenses, and debt buybacks totaling 2,924 billion rupees during the fiscal year. The review said federal interest expenses fell to 6,948 billion rupees in fiscal year 2026 from 8,887 billion rupees in fiscal year 2025. The federal fiscal deficit also declined to 4,763 billion rupees from 7,089 billion rupees, according to the ministry.
The fiscal year 2027 borrowing plan aims to reduce net reliance on short-term Treasury bills and replace their maturities with medium- and long-term instruments. The plan set a target net issuance of Pakistan Investment Bonds at 4,580 billion rupees, with fixed-rate bonds targeted to account for more than half of new issuance. On external financing, the plan estimated principal repayments of 15.6 billion dollars during the fiscal year. These include bilateral deposits of 7 billion dollars that the plan said are expected to be rolled over, along with 5.3 billion dollars owed to multilateral creditors and 3.3 billion dollars to commercial lenders. The plan provides a framework for tracking the financing mix and external maturities over the coming fiscal year.
The plan also points to a historically greater reliance on domestic financing to cover the fiscal deficit. From fiscal years 2017 to 2026, domestic sources financed an average of 81% of the deficit, compared with 19% for external financing, according to the Finance Ministry’s Debt Management Office. But external financing accounted for 25% of the federal deficit in fiscal year 2026, a level the plan said had not been recorded since fiscal year 2020. This detail accompanies the plan’s fiscal year 2027 aim to reduce net reliance on short-term bills and increase medium- and long-term issuance. The figures therefore connect the debt trajectory recorded in September with the financing choices the government has set out for the current fiscal year.