Pakistan’s public debt rises 7.7% to Rs86.72 trillion in FY26

Pakistan's total public debt climbed 7.7% to about Rs86.72 trillion by the end of June 2026, according to the Annual Debt Review FY2026 published by the Ministry of Finance's Debt Management Office. That pace was well below the 13% growth recorded a year earlier, and the debt-to-GDP ratio eased to 68.3% from 70.6%. Officials credited the slower build-up to tighter fiscal management, a primary surplus, and a 22% drop in interest expenditure.

Domestic debt rose 9% to Rs59.441 trillion, while external debt grew 6.8% year on year to $98.075 billion, bringing total public debt to $312 billion in dollar terms. Interest expenditure dropped to Rs6.948 trillion, compared with Rs8.887 trillion in the previous fiscal year, and the federal fiscal deficit shrank to Rs4.763 trillion, against Rs7.089 trillion before. Net federal revenues reached Rs10.52 trillion, up 6% year on year, while non-interest spending grew only 2.3%.

Commercial banks now hold 70% of domestic debt, up from 64%, while the State Bank's share fell to 5% after liability management operations. The country tapped global bond markets again after a four-year absence, raising $750 million through a Eurobond in April and CNY1.75 billion via a Panda bond in May. Multilateral lenders hold 45.5%, or $44.621 billion, of external debt, while the federal government accounts for 84% of external obligations.