KARACHI — The central government’s total debt surged to Rs74.94 trillion by the end of April 2025, marking a 13.39% year-on-year (YoY) increase compared to Rs66.09tr recorded in April 2024, according to data released by the State Bank of Pakistan (SBP).
On a month-on-month (MoM) basis, the debt stock rose by 1.69% from Rs73.69tr in March 2025, reflecting the ongoing fiscal pressures compelling the government to rely on both domestic and external borrowing to finance its budget deficit.
A breakdown of the data reveals that domestic debt remains the predominant component, amounting to Rs52.52tr — an 18.07% YoY increase and up 1.95% from the previous month. Domestic debt also comprises the bulk of total debt and liabilities, which stood at Rs52.74tr in April 2025, up 17.19% from Rs45tr in April 2024.
Within domestic debt, permanent debt accounted for Rs41.16tr, driven largely by federal government bonds worth Rs40.28tr. This category saw a significant YoY growth of 28.38%. Permanent debt also includes Rs474.94bn in on-lending by the SBP against Special Drawing Rights (SDRs), Rs403.09bn in prize bonds, and Rs2.84bn in market loans.
The government’s reliance on long-term instruments continued to intensify. Pakistan Investment Bonds (PIBs) were the cornerstone of long-term borrowing, with their stock rising 29.32% YoY to Rs34.32tr and 2.07% MoM. Overall, long-term domestic debt reached Rs44.13tr, up 25.28% YoY.
In contrast, short-term domestic debt declined 9.14% YoY to Rs8.33tr, despite a 5.99% MoM increase. Market Treasury Bills (MTBs) constituted Rs8.23tr of this amount. Floating debt, primarily comprised of MTBs, fell to Rs8.33tr from Rs9.17tr a year earlier.
Unfunded debt — mainly National Savings Schemes — registered modest growth of 6.01% YoY to Rs2.96tr. Savings schemes alone contributed Rs2.89tr, up 6.59% YoY.
Borrowing through Naya Pakistan Certificates showed a sharp YoY decline of 33.09%, standing at Rs62.05bn in April. On a monthly basis, it dipped by 0.98%.
Foreign currency loans dropped significantly to Rs11.82bn in April 2025, down from Rs373.52bn a year earlier, suggesting reduced reliance on this form of debt or repayments made during the year.
Meanwhile, external debt of the central government totaled around Rs22.41tr in April 2025 — comprising Rs22.2tr in long-term loans and Rs211.06bn in short-term external liabilities.
Additionally, domestic liabilities — which include obligations not categorized under core debt instruments — declined by 57.59% YoY to Rs219.6bn.
The expanding debt profile underscores the fiscal challenges faced by the government amid constrained revenue generation and rising expenditure needs. With an increased reliance on permanent and long-term debt instruments, particularly PIBs, the government appears to be restructuring its debt maturity profile to reduce short-term rollover risks — but at the cost of higher long-term servicing commitments.
