Pakistan’s total public debt rose 7.7 percent year-on-year to Rs. 86.72 trillion by the end of June 2026, according to the Annual Debt Review Report for Fiscal Year 2025-26 released by the Ministry of Finance.
Despite the increase in the debt stock, the public debt-to-GDP ratio improved to 68.3 percent from 70.6 percent a year earlier.
Domestic debt increased 9 percent to Rs. 59.44 trillion, while external debt rose 6.8 percent to $98.075 billion. In dollar terms, total public debt stood at around $312 billion at the end of June 2026.
The government’s interest payments declined 22 percent during FY26 to Rs. 6.948 trillion. The federal fiscal deficit also fell to Rs. 4.763 trillion from Rs. 7.089 trillion a year earlier.
The federal primary surplus increased to Rs. 2.185 trillion from Rs. 1.798 trillion, while net federal revenue rose 6 percent to Rs. 10.52 trillion. Total non-interest expenditure increased by 2.3 percent during the year.
Under the Fiscal Responsibility and Debt Limitation Act, government debt stood at Rs. 77.168 trillion, equivalent to 60.8 percent of GDP.
Around 75 percent of the federal fiscal deficit was financed through domestic sources, with net domestic financing reaching Rs. 3.586 trillion. External financing stood at Rs. 1.177 trillion.
Market Treasury Bills increased 25 percent to Rs. 10.928 trillion, while Sukuk and Bai-Muajjal financing rose 35 percent to Rs. 8.559 trillion. The share of commercial banks in government securities increased from 64 percent to 70 percent.
Pakistan also returned to international capital markets after a four-year gap. The government issued a $750 million Eurobond in April 2026 and 1.75 billion yuan in Panda bonds in May 2026.
By June 2026, the federal government accounted for 84 percent of Pakistan’s external public debt, while provincial and sub-national governments accounted for the remaining 16 percent. Punjab’s external debt stood at $6.40 billion, Sindh’s at $5.62 billion and Khyber Pakhtunkhwa’s at $2.97 billion.
During FY26, the government repaid Rs. 1.926 trillion owed to the State Bank of Pakistan and bought back Rs. 996 billion worth of market debt.
Government guarantees stood at Rs. 4.283 trillion at the end of June 2026, with the power sector accounting for around 56 percent of the total.
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