The federal government’s total debt stock decreased by Rs456 billion in October 2024, driven by record profit transfers from the State Bank of Pakistan (SBP) and continued debt servicing.
According to data released by the SBP, the total debt stood at Rs69.114 trillion at the end of October, down from Rs69.570 trillion in September 2024.
The decline followed the SBP’s unprecedented profit transfer of over Rs3 trillion to the government earlier this year. Domestic debt saw the largest reduction, falling by Rs305 billion to Rs47.231 trillion in October, compared to Rs47.536 trillion in the previous month.
External debt, calculated in rupee terms, dropped by Rs150 billion to Rs21.884 trillion in October. The exchange rate fluctuations had minimal impact, with the average dollar rate at Rs277.85 in October.
Despite the monthly decline, the year-to-date debt stock increased by Rs200 billion, rising from Rs68.914 trillion in June to Rs69.114 trillion in October. Analysts noted an 11% year-on-year increase in total federal debt by the end of October, highlighting the need for continued fiscal discipline to manage debt sustainably.
The government repaid $571 million in external debt during October. The SBP reported that lower interest rates are reducing the government’s domestic debt servicing costs, contributing to fiscal savings. The government’s interest expense target for FY25 is Rs9.8 trillion, but it is now expected to be below Rs8.5 trillion, saving Rs1.3 trillion, or 1% of GDP.
