Govt debt rises to Rs72.1trn, domestic borrowing surges to Rs50.2trn

The federal government’s total debt stock increased by over Rs3.2 trillion in the first seven months of the ongoing fiscal year (FY25), driven mainly by substantial domestic borrowing to cover the fiscal deficit. 

According to data released by the State Bank of Pakistan (SBP), the central government’s total debt, including both domestic and external liabilities, rose by 4.65% during this period.

By the end of January 2025, the overall debt stock had reached Rs72.123 trillion, up from Rs68.914 trillion in June 2024. A major contributor to this increase was domestic borrowing, which surged by 6.5%. 

The federal government borrowed an additional Rs3.08 trillion from domestic sources, bringing total domestic debt to Rs50.243 trillion in January 2025. Of this amount, Rs41.825 trillion comprised long-term loans, while Rs8.352 trillion was in short-term loans.

External debt, when measured in rupee terms, recorded a marginal increase of Rs126 billion, reaching Rs21.880 trillion in January 2025 from Rs21.754 trillion in June 2024. 

The SBP reported that the Weighted Average Customer Exchange Rate for the US dollar was Rs278.98 in January 2025, showing a slight rise from Rs278.77 in June 2024.

With limited external borrowing, the government has increasingly turned to domestic sources to meet financial obligations. The SBP provided over Rs3 trillion in profits to the federal government during the first half of FY25, offering a financial cushion for buyback operations of government securities.

Additionally, the Pakistan Stock Exchange (PSX) raised Rs91.6 billion for the government through the 19th Auction of GOP Ijarah Sukuk (GIS) held on March 6, 2025. 

The auction received bids totaling Rs207.9 billion for various GIS instruments, including one-year discounted, three-, five-, and ten-year fixed rental rate (FRR) sukuks, as well as variable rental rate (VRR) instruments. The government accepted bids worth Rs6 billion for the one-year GIS at a rate of 10.999 percent, reflecting a 75-basis-point increase.

Further, Rs28 billion was raised through three-year and five-year GIS FRRs at rates of 11.49 percent and 11.98 percent, respectively. Additionally, Rs57 billion was secured through a ten-year GIS VRR at 11.547%.