Pakistan’s Central Govt Debt Spikes By Rs. 7 Trillion in One Year

Pakistan’s total central government debt reached Rs. 76.6 trillion in September 2025, up 10 percent year-on-year (YoY), according to latest data released by the State Bank of Pakistan (SBP) and compiled by Topline Research. The report shows that domestic debt rose 12 percent from last year to stand at Rs. 53.4 trillion, while external debt increased 5 percent to Rs. 23.2 trillion. On a monthly basis, both debts declined by 1 percent, reflecting limited new borrowing and some repayments during the period. Within domestic obligations, long-term debt rose sharply by 24 percent YoY to Rs. 44.96 trillion. In contrast, short-term borrowing fell 25 percent to Rs. 8.4 trillion. The data also shows that the Naya Pakistan Certificates component of domestic debt dropped 26 percent YoY, signaling lower inflows from overseas Pakistanis compared to the same period last year. While the overall debt trajectory remains high, the month-on-month decline marks a rare slowdown in borrowing, likely due to fiscal discipline measures, improved revenue collection, and a cautious approach to fresh domestic financing. The government has also prioritized repayments to the SBP and commercial banks to ease refinancing pressures. On the external front, debt stability was supported by limited new disbursements and exchange rate adjustments. The foreign currency loan component remained almost unchanged at Rs. 379 billion, indicating no significant rise in short-term external liabilities. Despite the improvement, analysts caution that the debt burden remains heavy, accounting for a large share of GDP and budget expenditure. Sustained fiscal consolidation and higher tax revenues will be critical for easing long-term pressures on public finances.