Pakistan's debt growth falls to 20-year low, says finance adviser

Finance adviser Khurram Schehzad said in a post on X that public debt grew 7.7 per cent in FY26, the slowest pace in two decades and well below the 16 per cent average of the past 20 years. He added that the debt-to-GDP ratio had dropped to 68 per cent from 75 per cent in FY23, while external exposure reached a nine-year low. According to The Express Tribune, he also cited SBP reserves rising to $18.4 billion in fiscal 2025-26 from $2.9 billion in mid-fiscal 2022-23.

On debt management, Schehzad said Rs4.72tn of debt had been retired ahead of maturity, and average domestic debt maturity had lengthened to 3.8 years or more in FY26. Interest expense fell from about Rs8.9tn to Rs6.9tn, and interest payments now absorb 35 per cent of total revenues, down from 61 per cent in FY24. He also pointed to three consecutive primary surpluses and tax revenue growth of 11 per cent in FY26, which he said is faster than debt growth.

The State Bank of Pakistan's debt bulletin put total debt and liabilities at Rs99.6 trillion by June 2026, equal to 78.5 per cent of GDP, with gross public debt at Rs86.7 trillion. It reported interest expense falling from Rs9.5 trillion to Rs7.3 trillion, while external debt and liabilities rose to $138.6 billion. Schehzad also cited an S&P Global Ratings upgrade of Pakistan from B- to B with a Stable Outlook in July 2026.