Pakistan\u2019s government external debt rose to $106.8 billion by the end of the 2026 fiscal year. However, the Ministry of Finance asserts that the pace of debt accumulation has slowed compared to the past, and the debt-to-GDP (Gross Domestic Product) ratio has also declined.<\/p>\n\n\n\n
In a clarification issued on Monday, the Ministry of Finance stated that reports regarding a daily increase of 20 billion rupees in government debt do not present a complete or accurate picture of the country\u2019s public debt. According to the Ministry, assessing the debt situation requires comparing it against the size of the economy.<\/p>\n\n\n\n
The Ministry of Finance noted that Pakistan\u2019s total government debt-to-GDP ratio stood at less than 75 percent at the end of the 2023 fiscal year and further decreased to 68 percent by the end of the 2026 fiscal year.<\/p>\n\n\n\n
Similarly, the annual growth rate of debt was approximately 26 percent in the 2023 fiscal year, which dropped to 7.7 percent in the 2026 fiscal year.<\/p>\n\n\n\n
The Ministry stated that the growth rate of government debt in the 2026 fiscal year was at its lowest level in the past two decades; by comparison, the average annual growth rate between the 2007 and 2026 fiscal years was 16.7 percent.<\/p>\n\n\n\n
Regarding external debt, the Ministry reported that government external debt increased from over $100 billion at the end of the 2022 fiscal year to $106.8 billion by the end of the 2026 fiscal year. The Ministry further stated that, according to the latest figures for August 2026, the central government’s debt decreased by approximately Rs 689 billion compared to June 2026. A reduction in debt servicing costs was also recorded.<\/p>\n\n\n\n
According to the Ministry, these costs stood at approximately Rs 8,900 billion in the 2025 fiscal year, decreasing to about Rs 6,900 billion in the 2026 fiscal year. The ratio of debt servicing to total federal revenue also declined from 64 percent in the 2023 fiscal year to 38 percent in the 2026 fiscal year.<\/p>\n\n\n\n
The Ministry of Finance states that the government repaid high-cost debts\u2014amounting to over Rs 5,920 billion\u2014ahead of their scheduled maturity during the 2025 and 2026 fiscal years, as well as the early part of the 2027 fiscal year.<\/p>\n\n\n\n
According to the Ministry, Pakistan’s foreign exchange reserves rose to $21.5 billion by September 2026, whereas in the past, they had fallen to a record low of $2.9 billion.<\/p>\n","protected":false},"excerpt":{"rendered":"
Pakistan\u2019s government external debt rose to $106.8 billion by the end of the 2026 fiscal year. However, the Ministry of Finance asserts that the pace of debt accumulation has slowed compared to the past, and the debt-to-GDP (Gross Domestic Product) ratio has also declined.<\/p>\n","protected":false},"author":1,"featured_media":2562,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_themeisle_gutenberg_block_has_review":false,"footnotes":""},"categories":[22],"tags":[40,34],"class_list":["post-3421","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-pakistan","tag-government-of-pakistan","tag-pakistan"],"yoast_head":"\n