KARACHI: Pakistan’s central government debt stocks declined by Rs 345 billion during the first five months (July-November) of FY26, aided largely by the transfer of a healthy profit from the State Bank of Pakistan (SBP).
The SBP on Monday reported that Pakistan’s total debt stocks, including domestic and external, decreased to Rs 77.543 trillion by the end of November 2025, compared to Rs 77.888 trillion in June 2025, depicting a decline of 0.44 percent.
The reduction in central government debt was entirely driven by a contraction in external borrowing.
Pakistan’s external debt dropped by Rs 492 billion to Rs 22.925 trillion by the end of November 2025, down from Rs 23.417 trillion in June 2025, underscoring a lower reliance on foreign financing during the period.
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On the domestic front, however, government debt increased by Rs 147 billion in the first five months of this fiscal year to reach Rs 54.619 trillion. The rise was driven by a marked increase in long-term borrowing, which grew by 1.18 percent, or Rs 538 billion, to Rs 46.191 trillion in November 2025.
In contrast, the federal government’s short-term domestic debt declined by Rs 393 billion to Rs 8.363 trillion in November, compared with Rs 8.756 trillion in June, indicating a shift toward longer-tenor financing.
In addition, during the period under review, debt under the Naya Pakistan Certificate (NPC) also surged by Rs 2 billion to Rs 64 billion.
The SBP has earned a strong profit of Rs 2.5 trillion in the last fiscal year (FY25), out of which Rs 2.4 trillion was transferred to the federal government and the transfer of profit has improved the debt management.
Analysts view the decline in debt as a positive signal for the country’s economy and a welcome breather for policymakers, however, they warned that debt improvement will depend on sustained fiscal discipline and a meaningful strengthening of revenue collection.
According to the SBP, Pakistan’s debt management has improved and overall external debt burden has begun to ease, with the debt-to-GDP ratio falling from 31 percent to 26 percent in the last few years.
Copyright Business Recorder, 2026
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