Pakistan’s total debt burden has continued its steep climb, with both domestic and external liabilities rising significantly, according to the latest data from the State Bank of Pakistan (SBP). The country now faces mounting repayment obligations, including a net outflow of $30.6 billion in foreign currency over the coming months.
The total domestic debt and liabilities of the government soared by 18.81% year-on-year (YoY) to reach Rs51.28 trillion in February 2025, compared to Rs 43.17tr in the same month last year. On a month-on-month (MoM) basis, domestic debt increased by 1.49%.
A breakdown shows that permanent debt, which includes federal government bonds and prize bonds, grew by 25.42% YoY to Rs39.43tr. Floating debt, mainly comprising Market Treasury Bills, rose to Rs 8.23tr, while unfunded debt, including savings schemes, increased by 3.74% YoY.
Meanwhile, the central government’s overall debt surged by 12.69% YoY, reaching Rs 73.04tr in February. The bulk of this—Rs 51.02tr—was domestic, comprising Rs 42.72tr in long-term borrowing and Rs 8.23tr in short-term obligations. Within long-term debt, Pakistan Investment Bonds (PIBs) formed the largest share at Rs 32.56tr, marking a 25.07% YoY increase.
Naya Pakistan Certificates, a government initiative to attract overseas investments, saw a sharp 29.29% YoY drop, standing at Rs 70.14bn in February. However, compared to the previous month, borrowing through these certificates increased by 5.45%.
Pakistan’s external debt added further pressure, with the government owing Rs21.73tr in long-term foreign loans and Rs288.59bn in short-term external borrowings. These figures come as the country braces for substantial repayments over the next year.
According to SBP data, Pakistan must settle $30.6bn in foreign currency liabilities, including $3.74bn within a month and an additional $2.15bn in the next three months. The largest repayment burden—$24.7bn—will be due within the next year.
On top of loan repayments, Pakistan faces an interest payment obligation of $3.65bn, with $326m due this month and $561m in the upcoming quarter. Additionally, contingent liabilities amounting to $1.16bn, comprising guarantees issued for government entities, add to financial strain.
Market data shows a net shortfall of $2.82bn in Pakistan’s foreign currency forward and futures positions. Short positions stand at $2.9bn, with only a modest offset of $79m from long positions.
The continuous rise in domestic and external debt reflects Pakistan’s reliance on borrowing to cover fiscal deficits and maintain economic stability. Analysts warn that with significant repayments due in the coming months, the country’s foreign exchange reserves will remain under pressure unless external funding sources, such as IMF disbursements or foreign inflows, provide relief.
