The Federal Ministry of Finance has issued a clarification on Pakistan’s debt position, announcing that for the first time in history, the country has repaid ₹2,600 billion of its debt ahead of schedule. Officials emphasized that Pakistan’s debt profile is now more sustainable than in previous years.
According to the ministry’s spokesperson, improved debt management and declining interest rates have helped cut borrowing costs. As a result, Pakistan saved ₹850 billion in interest payments this year. The government had set aside ₹8.2 trillion for interest payments in the current fiscal year, down from the ₹9.8 trillion allocated last year.
Debt-to-GDP Ratio Improves
The ministry noted that the debt-to-GDP ratio, which stood at 74% in 2022, has now declined to 70% in 2025. This improvement, officials said, reflects reduced refinancing and rollover risks, contributing to greater financial stability. The federal deficit also narrowed to ₹7.1 trillion from ₹7.7 trillion previously, bringing the deficit-to-GDP ratio down from 7.3% to 6.2%.
Primary Surplus and Slower Debt Growth
Pakistan recorded a primary surplus of ₹1.8 trillion for the second consecutive year, the ministry confirmed. Annual debt growth also slowed to 13% compared to 17% last year. The average maturity of public debt improved from 4 years to 4.5 years, while domestic debt maturity rose from 2.7 years to 3.8 years, signaling reduced repayment pressures. For the first time in 14 years, Pakistan also posted a current account surplus of $2 billion. The ministry clarified that a partial increase in external debt came from IMF and Saudi Oil Fund facilities, while an additional ₹800 billion increase was attributed to rupee depreciation rather than new borrowings.
