Pakistan’s Public Debt Rises to Rs86.72 Trillion
Pakistan’s total public debt increased by 7.7% year-on-year to Rs86.72 trillion by the end of June 2026, according to the Annual Debt Review Report for Fiscal Year 2025-26 released by the Ministry of Finance.
Despite the rise in the overall debt, the public debt-to-GDP ratio improved to 68.3%, compared with 70.6% recorded a year earlier.
Domestic and External Debt
The country’s domestic debt increased by 9% to Rs59.44 trillion, while external public debt rose by 6.8% to $98.075 billion.
In dollar terms, Pakistan’s total public debt stood at around $312 billion at the end of June 2026.
The report also showed improvement in some fiscal indicators. Government interest payments declined by 22% to Rs6.948 trillion during FY2025-26, while the federal fiscal deficit fell to Rs4.763 trillion, compared with Rs7.089 trillion in the previous fiscal year.
Primary Surplus Improves
Pakistan’s federal primary surplus increased to Rs2.185 trillion, up from Rs1.798 trillion a year earlier.
Net federal revenue also increased by 6% to Rs10.52 trillion, while total non-interest expenditure rose by 2.3%.
Under the Fiscal Responsibility and Debt Limitation Act, government debt stood at Rs77.168 trillion, equivalent to 60.8% of GDP.
Domestic Financing Remains Major Source
Around 75% of the federal fiscal deficit was financed through domestic sources. Net domestic financing reached Rs3.586 trillion, while external financing stood at Rs1.177 trillion.
Market Treasury Bills increased by 25% to Rs10.928 trillion, while Sukuk and Bai-Muajjal financing rose by 35% to Rs8.559 trillion.
The share of commercial banks in government securities also increased from 64% to 70%.
Pakistan Returns to International Markets
During FY2025-26, Pakistan returned to international capital markets after a four-year gap.
The government issued a $750 million Eurobond in April 2026 and 1.75 billion yuan in Panda bonds in May 2026.
By June 2026, the federal government accounted for 84% of Pakistan’s external public debt, while provincial and sub-national governments accounted for the remaining 16%.
Punjab’s external debt stood at $6.40 billion, Sindh’s at $5.62 billion and Khyber-Pakhtunkhwa’s at $2.97 billion.
Government Liabilities and Guarantees
During FY2025-26, the government repaid Rs1.926 trillion owed to the State Bank of Pakistan and bought back Rs996 billion worth of market debt.
Government guarantees stood at Rs4.283 trillion at the end of June 2026, with the power sector accounting for around 56% of the total.
Overall, the latest debt report shows that while Pakistan’s total public debt continued to increase, several key fiscal indicators, including the debt-to-GDP ratio, fiscal deficit and interest payments, improved during the financial year.
