Record Rs2.6 Trillion Debt Repaid: Finance Ministry

The Federal Ministry of Finance has announced a historic milestone in Pakistan’s debt management efforts. For the first time, the country repaid Rs2,600 billion in debt ahead of schedule. Officials said improved planning and falling interest rates helped reduce borrowing costs. As a result, Pakistan saved Rs850 billion in interest payments this year alone. This marks a major shift toward financial discipline and long-term sustainability.

The government also reduced its interest payment allocation for the current fiscal year. It set aside Rs8.2 trillion, down from Rs9.8 trillion last year. The ministry credited better debt management policies for the savings. Officials highlighted the impact of lower borrowing rates and tighter spending. This also helped reduce the pressure on the federal budget and supported stability.

Pakistan’s overall debt indicators have shown positive trends in recent years. The debt-to-GDP ratio dropped from 74 percent in 2022 to 70 percent in 2025. Officials said this reflects lower rollover and refinancing risks. The federal deficit also declined to Rs7.1 trillion, down from Rs7.7 trillion. Meanwhile, the deficit-to-GDP ratio improved from 7.3 percent to 6.2 percent, showing greater fiscal control.

The country recorded a primary surplus of Rs1.8 trillion for the second straight year. Annual debt growth also slowed from 17 percent to 13 percent. Public debt maturity improved from 4 years to 4.5 years. Domestic debt maturity rose from 2.7 years to 3.8 years. This means Pakistan now faces fewer short-term repayment risks.

In external accounts, Pakistan posted its first current account surplus in 14 years. The surplus stood at $2 billion, helped by reduced imports and stronger inflows. A partial rise in external debt came from IMF and Saudi Oil Fund support. An extra Rs800 billion increase was due to rupee depreciation, not new loans. The ministry said the country’s debt profile is now more stable and resilient.