Islamabad, July 9, 2025: Federal government borrowing for budgetary support saw a significant 30% drop in FY25, falling to Rs. 5.554 trillion from Rs. 7.89 trillion in FY24, according to the State Bank of Pakistan (SBP). The decline is attributed to strict fiscal management, record profit transfers from SBP, and early repayments of public debt.
Borrowing from scheduled banks also declined sharply—down 38% to Rs. 5.277 trillion in FY25 compared to Rs. 8.498 trillion last year. Meanwhile, the government borrowed Rs. 276.5 billion from SBP, a major turnaround from a net retirement of Rs. 608.3 billion in FY24.
One of the key enablers of this fiscal shift was the SBP’s record Rs. 3.4 trillion profit transfer to the government. This historic inflow supported Pakistan’s first-ever buyback auction of securities and helped retire Rs. 1.5 trillion in public debt—including Rs. 500 billion to SBP, four years before its 2029 maturity.
These measures contributed to a reduction in Pakistan’s debt-to-GDP ratio, dropping from 75% in FY23 to 69% in FY25, reflecting improved financial discipline.
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At the provincial level, repayments totaled Rs. 532 billion in FY25, up from Rs. 387.5 billion last year. Breakdown by region:
- Sindh: Rs. 145 billion
- Punjab: Rs. 28.5 billion
- Balochistan: Rs. 8.2 billion
- Khyber Pakhtunkhwa: Borrowed Rs. 12 billion
- AJK: Repaid Rs. 15 billion
- Gilgit-Baltistan: Repaid Rs. 7 billion
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This fiscal consolidation strengthens Pakistan’s economic outlook and signals a shift toward sustainable financial management.
