Pakistan’s Domestic Debt Drops to Rs57.7 Trillion in Q1 of FY27

News Desk

KARACHI: The federal government of Pakistan has reported a significant decline in domestic debt, which fell to Rs57.757 trillion by the end of the first quarter of the fiscal year 2026-27, down from Rs59.393 trillion at the end of June 2023.

This marks a reduction of Rs1.636 trillion within just three months, reversing the upward trend observed in the previous year.

The latest data released by the State Bank of Pakistan (SBP) indicates that the government’s net retirement of scheduled-bank debt surged to Rs1.847 trillion from July to October FY27, a stark increase from Rs45 billion during the same period last fiscal year.

This suggests that debt repayments have outpaced new borrowing, a positive sign for fiscal management. Planning, Development and Special Initiatives Minister Ahsan Iqbal noted that the fiscal deficit has narrowed to 2.6% of GDP in FY26, the lowest in two decades, compared to 5.4% in FY25.

This decline in domestic debt is significant for Pakistan’s economy, particularly as the government continues to implement measures under the International Monetary Fund (IMF) programme aimed at tightening fiscal policy.

The reduction in debt levels could enhance investor confidence and stabilize the economy, which has faced numerous challenges in recent years.

Looking ahead, the government is expected to maintain its focus on reducing the fiscal deficit further in the current fiscal year. Continued monitoring of debt levels and fiscal policies will be crucial as Pakistan navigates its economic landscape amidst ongoing reforms and international scrutiny.