Pakistan records Rs3.5 trillion in sukuk issuance during FY26, plans first short-term programme

Pakistan issued a record Rs3.5 trillion in sukuk during FY26 through a hybrid structure and expanded retail participation, officials said during an investor briefing at the Pakistan Stock Exchange (PSX).

The session brought together representatives from the Ministry of Finance, PSX, banks, asset managers, brokers and other stakeholders to discuss debt management, sukuk issuance, secondary market development and fiscal reforms.

Khaliq Uz Zaman, Director of Domestic Debt, said the average time to maturity increased to 3.9 years, close to the government's four-year target, while the average time to refixing improved to 1.3 years. He added that the weighted average cost of borrowing was contained at 11.2%, below the policy rate.

He said conventional securities grew 25% year-on-year, while sukuk trading through the PSX surged 275%.

Looking ahead, he said the government plans to launch its first short-term sovereign sukuk programme, targeting Rs400-500 billion through three- and six-month tenors to complete the sovereign sukuk curve and broaden the investor base.

Khurram Shehzad, adviser to the finance minister, said Pakistan's debt-to-GDP ratio declined from 75.2% in 2023 to 68.5%, while the government retired Rs4.7 trillion in expensive debt over the past two years, including Rs2.2 trillion in FY26. He added that debt growth slowed to 5%, the lowest level in 15 years, and the share of government revenue spent on debt servicing fell from 61% to 40%.

Omer Khan, adviser on debt to the finance minister, said debt sustainability remains the government's central objective.

On the external front, officials said Roshan Digital Account inflows have reached $300 million per month.

PSX Managing Director and Chief Executive Farrukh H. Sabzwari said total government debt issuance through the capital market has reached Rs6.4 trillion, while average daily trading volume increased from Rs2 billion to Rs3.9 billion.