ISLAMABAD: Advisor to the Finance Minister Khurram Schehzad has said that Pakistan retires Rs 2,600 billion debt before time — a first in the country’s history.
The advisor on Sunday took to X and stated that in an unprecedented move and a record achievement for fiscal responsibility, the Ministry of Finance (MoF), government of Pakistan (GoP), has retired over Rs 1.6 trillion of debt owed to the State Bank of Pakistan (SBP) — and done so in just 59 days.
On June 30, 2025, the Ministry early-retired Rs 500 billion. Only two months later, on August 29, 2025, the Debt Management Office executed another monumental repayment of Rs 1,133 billion, which brings the total early retirement of SBP debt to Rs 1,633 billion.
Pakistan debt stock reaches all-time high of Rs75trn
The MoF had earlier in 1H fiscal year 2025 retired domestic commercial market debt of Rs1.0 trillion — the first such advanced debt retirement operation in Pakistan’s history.
Including both the central bank and commercial portions, the total early debt retirement in less than one year now comes to over Rs 2.6 trillion — an unprecedented scale and decisive action in the country’s fiscal history.
This action marks a decisive shift from past debt-heavy practices, where reliance on borrowing crowded out fiscal space and increased risks. Now, debt discipline is firmly in action: He stated that 30 percent of SBP debt retired early: In just under two months, Pakistan cut SBP debt from Rs5.5 trillion to 3.8 trillion — nearly 30 percent retired well before its 2029 maturity.
He said reduced risks, improved fiscal space. Early repayments eased the 2029 refinancing burden, lowered rollover risks, and created more room for development spending.
The advisor said that the average maturity of domestic debt has risen to 3.8 years from 2.7 in fiscal year 2024 — the sharpest single-year improvement in history, and well ahead of IMF targets.
Major taxpayer savings: With falling rates and disciplined repayments, the government has already secured over Rs 800 billion in taxpayer savings (FY25). This is not just debt repayment — it is responsible, forward-looking financial governance. By reversing the old cycle of unchecked borrowing and putting repayment at the centre of fiscal management, Pakistan is restoring credibility, strengthening resilience, and building a more sustainable future, the advisor added.
Copyright Business Recorder, 2025