Pakistan repays Rs3,650bn debt ahead of time: Khurram

ISLAMABAD: Pakistan repaid over Rs 3,650 billion debt before time - first in country’s history, said Khurram Schehzad, Advisor to Federal Minister for Finance and Revenue.

For the first time in its history, starting from late 2024, Pakistan has been repaying its debt before maturity - at an unprecedented scale, he shared these details on X- formerly known Twitter.

In just 14 months, the Ministry of Finance, Government of Pakistan, has early-retired Rs 3,654 billion of domestic debt owed to the market as well as the State Bank of Pakistan (SBP).

READ MORE: Govt debt stocks slump Rs345bn in 5 months

The latest repayment - Rs300 billion - was made to the SBP on Thursday, he added.

This landmark achievement reflects a decisive shift toward fiscal discipline, credibility, and responsible economic management.

The Early Debt Retirement Journey

• Dec 2024: PKR 1,000 billion

• Jun 2025: PKR 500 billion

• Aug 2025: PKR 1,160 billion

• Oct 2025: PKR 200 billion

• Dec 2025: PKR 494 billion

• Jan 2026: PKR 300 billion

With latest debt retired today, FY26 (Jul–Jan) alone recorded Rs2,150+ billion in early retirement - 44 percent higher than fiscal year 2025.

Strengthening Public Finances through Early Debt Retirement - Restoring Fiscal Credibility

Central Bank Debt Slashed:

• Nearly 44% of SBP debt retired early, reduced from ~PKR 5,500 billion to ~PKR 3,000 billion

• Debt originally maturing in 2029 paid off years ahead of schedule

Healthier Debt Profile

Of total early repayments:

• 65pc SBP debt

• 30pc T-Bills

• 5pc PIBs

The trend is also visible in total public debt, which declined from over Rs 80.5 trillion (Jun-25) to Rs80 trillion (Nov-25).

Crucially, Pakistan’s debt-to-GDP ratio, around 74pc in FY22, has declined to around 70pc, reflecting a broader strengthening of fiscal fundamentals alongside disciplined debt management.

Beyond Per Capita Sensationalism: What Really Reduces Debt Burden?

Per-capita debt makes noise, not sense. If it were the right yardstick, many of the world’s most advanced economies would automatically be in perpetual crisis simply because their per-person debt is among the highest, for example (est.):

• Japan: USD95k+ per person

• United States: USD80k–$100k

• Italy: USD70k+

• Canada: USD60k

• Germany: USD55k

• France: USD50k

• United Kingdom: similarly high, close to the top group

What truly matters is debt sustainability: debt-to-GDP, revenue and repayment capacity, interest savings, maturity and rollover risk, and the savings achieved through early repayments and lower borrowing costs.

These improvements reduce future obligations and risks, ease the real burden on the country, and create fiscal space for growth and development. This is real progress, beyond headline sensationalism.

Lower Risk, More Space

• Reduced refinancing and rollover risks

• Lower borrowing costs through debt switches from expensive to cheaper instruments

• Greater fiscal room for development and social spending

Stronger Fiscal Resilience

• Average domestic debt maturity improved from 2.7 years (FY24) to over 4.0 years - the sharpest single-year improvement on record

Massive Taxpayer Savings

• PKR 850+ billion saved in FY25

• Another PKR 800+ billion expected in FY26 through debt switches, stable rates, and continued discipline A Shift from Borrowing to Responsibility

This is more than debt repayment - it is a fundamental reset.

Pakistan is breaking away from decades of debt-heavy practices and placing repayment, risk reduction, and sustainability at the core of fiscal management. The result is restored credibility, stronger resilience, and a more secure economic future.

This is what responsible economic governance looks like - judged by sustainability, risk reduction, and fiscal strength, not by misleading headline metrics such as per-capita debt, the Advisor added.

Copyright Business Recorder, 2026