ISLAMABAD, March 29: Despite a 10% increase in total public debt, reaching Rs74.103 trillion by December 2024, the government has asserted that debt risks are declining and economic indicators are improving.
In its latest Debt Bulletin released on Friday, the Ministry of Finance (MoF) reported that total public debt had risen by Rs6.683 trillion from Rs67.330 trillion in the same period last year.
Economic Stability & Debt Sustainability
The MoF attributed the improved debt outlook to economic stabilization and fiscal consolidation during the first half of the 2024-25 fiscal year (1HFY25).
It highlighted that the public debt stock had grown by 3.9% in 1HFY25, a slower increase compared to 7% in the same period last year.
Key factors contributing to debt stabilization include:
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Federal primary surplus – indicating controlled spending
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Stable exchange rate – reducing currency-related debt burdens
The government remains optimistic that these trends will lead to greater fiscal sustainability and reduced economic risks moving forward.
Read More: Pakistan’s Public Debt Surpasses Sustainable Limit
Govt Claims Falling Debt Risks Amid Improved Economic Indicators
The Ministry of Finance (MoF) has reported a significant improvement in Pakistan’s debt indicators, citing a primary surplus, improved debt maturity periods, and credit rating upgrades.
Key Highlights:
🔹 Primary Surplus for the First Time in 20 Years:
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FY24: 0.9% of GDP
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July-Dec FY25: 2.9% of GDP
🔹 Credit Rating Upgrade:
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International rating agencies upgraded Pakistan’s credit rating by one notch
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Outlook changed from stable to positive
🔹 Debt Risk Reduction:
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Average Time to Maturity (ATM) for domestic debt increased from 2.9 years (June 2024) to 3.4 years
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External debt maturity remained stable at 6.2 years
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External debt share reduced to 32.6% of total public debt, limiting forex risks
Also Read: Government Decreases Public Debt Repayment Target By 21% For FY25
🔹 Fiscal Deficit & Borrowing Strategy:
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Federal fiscal deficit financed mainly through domestic borrowing
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Issuances of Pakistan Investment Bonds (PIBs) & Government Ijarah Sukuks (GIS) played a key role
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Rs1 trillion buyback under the Government Securities Buyback and Exchange Programme led to Rs31 billion savings in debt servicing
🔹 Debt Composition:
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Domestic Debt Share: 67% (grew by 5% in 1HFY25, compared to 9% in 1HFY24)
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External Debt Share: 33%
The MoF stated that these improvements in debt management and fiscal policy are crucial in reducing economic vulnerabilities and enhancing long-term stability.
