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

Pakistan’s central government debt climbed to Rs. 76.6 trillion in September 2025, marking a 10 percent increase compared to the same month last year, according to new data from the State Bank of Pakistan compiled by Topline Research. Domestic debt rose 12 percent year-on-year to Rs. 53.4 trillion, while external debt increased 5 percent to Rs. 23.2 trillion.

On a month-to-month basis, both domestic and external debt edged down by 1 percent, reflecting a slowdown in new borrowing and some repayments during the period. Long-term domestic debt surged 24 percent year-on-year to Rs. 44.96 trillion, whereas short-term borrowing fell sharply by 25 percent to Rs. 8.4 trillion.

The data also shows a 26 percent decline in Naya Pakistan Certificates, highlighting lower inflows from overseas Pakistanis compared to the previous year. Analysts note that although the overall debt level remains elevated, the monthly decline points to tighter fiscal discipline, improved revenue collection, and a cautious approach to new domestic financing. The government has been prioritizing repayments to the State Bank and commercial banks to reduce refinancing pressures.

On the external side, debt stability was aided by limited new disbursements and modest exchange rate adjustments. Foreign currency loan obligations remained steady at around Rs. 379 billion, suggesting no significant buildup in short-term external liabilities.

Despite these encouraging signs, experts warn that Pakistan’s debt burden is still heavy relative to GDP and continues to consume a substantial share of the budget. Sustained fiscal consolidation, stronger tax revenues, and long-term reforms will be essential to easing pressure on public finances in the years ahead.