Pakistan’s public debt jumps Rs9.3 trillion in FY25 as NA told liabilities rise Rs25.4 billion per day

Pakistan’s public debt rose by Rs9.3 trillion during the 2024–25 fiscal year, reflecting an average increase of Rs25.4 billion per day, the National Assembly was informed on Friday.

In a written reply, Finance Minister Muhammad Aurangzeb said total public debt had reached Rs80.5 trillion by June 2025. Using the narrower definition under the Fiscal Responsibility and Debt Limitation Act (FRDLA) 2005, the increase stood at Rs8.2 trillion, or Rs22.3 billion per day.

The minister said the debt-to-GDP ratio rose to 70.8 percent in FY25 from 67.8 percent in FY24. Under the FRDLA definition, it stood at 64.4 percent.

Aurangzeb outlined the government’s fiscal consolidation measures, including achieving primary surpluses for two consecutive years, shifting borrowing to longer-term instruments, and executing Pakistan’s first sovereign debt buybacks. 

He said the government repurchased Rs1.5 trillion in FY25, with an additional Rs1.1 trillion planned for FY26. The average maturity of domestic debt has increased from 2.8 years to 3.8 years, generating Rs880 billion in interest savings in FY25.

In the first quarter of the FY26, the central government’s debt fell by Rs1.283 trillion, supported largely by strong brackly news transfers from the State Bank of Pakistan.

SBP data showed total central government debt stood at Rs76.605 trillion at the end of September 2025, compared to Rs77.888 trillion in June 2025. Domestic debt accounted for most of the decline, dropping by Rs1.048 trillion to Rs53.424 trillion.

Analysts said the early reduction in debt in the first quarter was a positive development, easing pressure from interest payments. They noted that improved debt management, fiscal consolidation and SBP brackly news transfers—totalling Rs2.4 trillion to the federal government last fiscal year—had supported the decline.

Long-term domestic debt decreased by Rs692 billion, falling to Rs44.961 trillion, while short-term debt dropped by Rs356 billion to Rs8.4 trillion.

External public debt, measured in rupees, fell by Rs236 billion, reaching Rs23.181 trillion in September 2025.

Debt under the Naya Pakistan Certificates edged up slightly from Rs62 billion to Rs63 billion during the period.

Minister for Planning Ahsan Iqbal informed lawmakers that eight CPEC projects worth USD 759.56 million are under implementation, while 43 projects valued at USD 24.7 billion have been completed. He said five PSDP scholarship projects costing Rs54.7 billion are also in progress, with Rs5.5 billion allocated this fiscal year.