Central govt debt rises 2.5% to Rs79.88 trillion by February 2026

Pakistan’s central government debt increased by nearly Rs2 trillion during the first eight months of FY2026, driven mainly by higher domestic borrowing, according to data released by the State Bank of Pakistan.

Total debt, including domestic and external liabilities, reached Rs79.882 trillion by the end of February 2026, up Rs1.994 trillion, or 2.5%, from Rs77.888 trillion recorded at the end of June 2025.

The rise was primarily attributed to increased borrowing from the domestic banking system to meet financing requirements, as revenue growth remained insufficient to fully cover government expenditures.

Domestic debt recorded a 4% increase during July–February, rising by Rs2.207 trillion to Rs56.679 trillion. Within this, long-term debt increased by Rs1.828 trillion to Rs47.481 trillion, while short-term debt rose by Rs376 billion to Rs9.132 trillion.

In contrast, external debt declined by Rs214 billion to Rs23.203 trillion by the end of February, compared to Rs23.417 trillion at the start of the fiscal year.

Fiscal indicators showed a surplus in the overall balance during the current fiscal year, with the primary surplus remaining close to last year’s level, supported by controlled expenditures and lower interest payments.

Tax collection grew by 10.6% during the period but remained below the pace required to meet the annual target.

The State Bank of Pakistan emphasised the need to continue fiscal consolidation through expansion of the tax base and implementation of structural reforms to support economic stability.

The central bank also noted that it had reduced the cash reserve requirement to inject liquidity into the banking system and support lending to the private sector.