ISLAMABAD: Pakistan’s total public and publicly guaranteed (PPG) debt increased by Rs6.21 trillion, or 7.3 per cent, to Rs90.98 trillion by the end of June 2026, compared to Rs84.77 trillion recorded a year earlier, according to a senior Finance Ministry official.
Despite the increase in the overall debt stock, the PPG debt-to-GDP ratio declined from 74.3 per cent in June 2025 to 71.7 per cent by June 2026, reflecting a reduction of 2.6 percentage points.
Domestic debt recorded a substantial increase of Rs4.93 trillion during the year, rising from Rs56.7 trillion to Rs61.65 trillion. According to officials, changes in interest rates and the larger share of floating-rate debt were among the key factors behind the increase.
The average time to maturity of domestic debt stood at 3.8 years, while the average time to interest rate re-fixing was recorded at 1.4 years.
Meanwhile, external debt increased by Rs1.29 trillion, climbing from Rs28.06 trillion in June 2025 to Rs29.35 trillion by June 2026. Around 60 per cent of external debt carried fixed interest rates, while the remaining 40 per cent was linked to floating rates. Long-term debt accounted for 90 per cent of the external debt portfolio.
Outstanding government guarantees stood at Rs4.28 trillion at the end of June 2026.
Pakistan’s overall public debt reached Rs86.7 trillion, up 7.7 per cent from Rs80.5 trillion a year earlier. However, the public debt-to-GDP ratio fell from 70.6 per cent to 68.3 per cent.
The Finance Ministry official attributed the decline in the debt ratio to nominal GDP growth, a federal primary surplus of Rs2.18 trillion and government debt buybacks.
Another significant development was the reduction in debt servicing costs. Interest payments declined by Rs1.94 trillion, or 21.7 per cent, from Rs8.88 trillion in FY2025 to Rs6.95 trillion in FY2026.
The figures indicate that while Pakistan’s overall debt continued to rise, the debt-to-GDP ratio and interest payments recorded a decline during the financial year.
