Excluding IMF loan: Total debt reaches Rs81.9trn by 11MFY26: Aurangzeb

ISLAMABAD: Federal Minister for Finance and Revenue Senator Muhammad Aurangzeb said that the central government’s total debt, excluding loans from the International Monetary Fund (IMF), stood at Rs81.9 trillion during July-May 2025-26.

In a written reply to a question in the National Assembly on Wednesday, Aurangzeb said that total domestic debt stood at Rs58.1 trillion, while external debt, excluding IMF debt, amounted to Rs23.8 trillion.

He said total central government debt stood at Rs77.9 trillion in July 2026, including domestic debt of Rs54.5 trillion and external debt of Rs23.4 trillion.

READ MORE: Govt debt stock rises by Rs5.7trn in FY26

The Finance Minister said that during the 11 months, the total debt of the central government increased by Rs4 trillion, or 5.2 percent, marking the slowest pace of increase in the last 15 years on an 11-month fiscal-year basis.

Senator Aurangzeb said the Fiscal Responsibility and Debt Limitation Act outlines a debt reduction path under which debt is to be reduced by a defined percentage—0.75 percent starting from FY24—to bring the debt-to-GDP ratio down to 50 percent by FY33.

He said the purpose of the Act was to provide sound principles of fiscal and debt management, including reducing the federal fiscal deficit and public debt-to-GDP ratio and maintaining them within prudent limits.

The Minister said the debt-to-GDP ratio for June 2026 was estimated at 68.5 percent, while the amount of total public deposits was yet to be published by the State Bank of Pakistan (SBP). However, based on the end-March 2026 figure of Rs7.9 trillion, the debt-to-GDP ratio was estimated to reach 62.2 percent for FY26, he said.

He said the government had adopted fiscal consolidation measures to generate primary surpluses since FY23, thereby reducing the need for incremental borrowing.

He said that the government had also adopted effective debt management strategies, including debt buybacks and retirements, while improving the maturity profile and reducing reliance on short-term borrowing.

“This shift towards longer-tenor instruments and improved macroeconomic stability helped contain debt-servicing costs, with interest expenses for 9MFY26 standing at Rs4.9 trillion, compared with Rs6.4 trillion during the same period of FY25, representing a 23 percent year-on-year decline,” he said.

The Minister said a downward trajectory in the debt-to-GDP ratio was therefore evident, as the government remained committed to effectively implementing fiscal consolidation and debt management strategies.

Answering another question about Saudi deposits, the Finance Minister said Saudi Arabia had placed fresh deposits of USD 3 billion with the State Bank of Pakistan (SBP) in April 2026, in addition to the USD 5 billion in deposits already held by the SBP from Saudi Arabia.

He said the existing USD 5 billion deposits had also been rolled over, providing crucial support for Pakistan’s external financing needs.

In reply to another question about Pakistan-US trade, the Minister said the United States remained Pakistan’s single-largest export market. He said Pakistan’s exports to the US stood at USD 5.9 billion during FY2025-26.

Copyright Business Recorder, 2026