Pakistan’s central government debt declined by Rs345 billion during the first five months of FY26 (July–November), driven largely by lower external borrowing and the transfer of profits from the central bank, with total public debt falling to Rs77.543 trillion by end-November 2025 from Rs77.888 trillion in June, according to data released by the State Bank of Pakistan.
The fall in overall debt was driven entirely by a contraction in external liabilities. External debt declined by Rs492 billion to Rs22.925 trillion by end-November, compared with Rs23.417 trillion at the close of FY25, indicating lower reliance on foreign financing during the period.
On the domestic side, government debt rose by Rs147 billion to Rs54.619 trillion over July–November. The increase reflected a shift toward longer-tenor instruments, with long-term domestic debt rising by Rs538 billion, or 1.18%, to Rs46.191 trillion by November.
In contrast, short-term domestic debt declined by Rs393 billion to Rs8.363 trillion from Rs8.756 trillion in June, underscoring a move toward longer-term financing. Debt under the Naya Pakistan Certificate increased by Rs2 billion to Rs64 billion during the period.
The central bank reported earning profits of Rs2.5 trillion in FY25, of which Rs2.4 trillion was transferred to the federal government. The transfer supported debt management during the current fiscal year.
According to the SBP, Pakistan’s debt metrics have improved in recent years, with the external debt-to-GDP ratio declining from 31% to 26%. Analysts note that sustaining the improvement will depend on continued fiscal discipline and stronger revenue mobilisation.
