- October 1, 2026
- Posted by: Tresmark
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Pakistan’s total public debt increased 7.7% year-on-year to around Rs86.72 trillion by the end of June 2026, according to the Ministry of Finance’s Annual Debt Review FY2026.
Despite the rise in debt, the public debt-to-GDP ratio improved to 68.3% from 70.6% a year earlier, supported by fiscal consolidation, a Rs2.185 trillion federal primary surplus and lower interest costs.
Domestic debt rose 9% to Rs59.44 trillion, while external debt increased 6.8% to $98.08 billion. In dollar terms, total public debt stood at around $312 billion.
Interest expenditure fell 22% to Rs6.95 trillion in FY2026 from Rs8.89 trillion a year earlier, while the federal fiscal deficit narrowed to Rs4.76 trillion from Rs7.09 trillion. Net federal revenues increased 6% to Rs10.52 trillion, while non-interest expenditure grew 2.3%.
The government financed 75% of the federal fiscal deficit through domestic borrowing and the remaining 25% through external sources. Net domestic financing stood at Rs3.59 trillion, while net external financing amounted to Rs1.18 trillion.
On the external side, medium- and long-term debt accounted for 84% of external public debt at end-June 2026, up from 76% a year earlier, while short-term debt fell to 16%.
Pakistan also returned to international capital markets during FY2026, issuing a $750 million Eurobond in April and a CNY1.75 billion Panda bond in May.
