KARACHI: Pakistan’s central government debt surged to Rs 78.2 trillion in the first month of the fiscal year 2025-26 (FY26), continuing its upward trajectory.
According to data released by the State Bank of Pakistan (SBP), the total debt, including both domestic and external borrowings, grew by Rs 350 billion in July 2025.This increase brings the country’s total debt to Rs 78.238 trillion, up from Rs 77.888 trillion in June 2025. On a year-on-year basis, the central government’s debt has risen by 12.4 percent, compared to Rs 69.623 trillion in July 2024.
A closer look at the breakdown reveals that domestic debt saw a notable rise, climbing by 15.2 percent year-on-year (YoY) and 1 percent month-on-month (MoM), reaching Rs 54.9 trillion in July 2025 as against Rs 54.471 trillion in June 2025 and Rs 47.716 trillion in July 2024.
Rs9trn jump in govt debt stocks in FY25: SBP
In contrast, external debt grew at a slower pace, up 6.1 percent YoY but decreased by 0.7 percent MoM, totaling Rs 23.3 trillion by the end of July 2025.
The decline in external debt is likely due to fluctuations in the exchange rate, which can reduce the local currency value of foreign-denominated debt.
The Weighted Average Customer Exchange Rate for the US dollar was Rs 282.8537in July 2025, compared to Rs 283.7493 in June 2025 for the calculation of external debt.
The SBP has earned a healthy profit in the last fiscal year (FY25) and major part Rs 2.4 trillion of the profit is transferred to the federal government. With the receipt of SBP profit, the net budgetary borrowing from the banking system declined sharply, while banks’ credit to the non-government sector increased.
For FY26, the federal government aims further fiscal consolidation with a targeted primary surplus of 2.4 percent of GDP. Achieving this target will hinge on concerted revenue collection efforts and rationalization of expenditures.
Copyright Business Recorder, 2025
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