Pakistan’s central government debt surges to PKR 76 trillion by May
Shift toward long-term borrowing and broader investor base aims to stabilize debt profile, says finance minister
Haris Zamir
Business Editor
Experience of almost 33 years where started the journey of financial journalism from Business Recorder in 1992. From 2006 onwards attached with Television Media worked at Sun Tv, Dawn Tv, Geo Tv and Dunya Tv. During the period also worked as a stringer for Bloomberg for seven years and Dow Jones for five years. Also wrote articles for several highly acclaimed periodicals like the Newsline, Pakistan Gulf Economist and Money Matters (The News publications)
Pakistan’s central government debt has climbed to PKR 76.05 trillion by the end of May, reflecting a 12.3% increase from the same period last year, according to the latest figures released by the State Bank of Pakistan (SBP).
The SBP reported that the central government’s debt rose by PKR 8.31 trillion in just one year — from PKR 67.73 trillion in May 2024 to PKR 76.045 trillion in May 2025.
Domestic debt accounted for the bulk of this increase, reaching PKR 53.46 trillion, up 15.9% from PKR 47.16 trillion in June 2024. External debt also rose, though at a more modest pace, to PKR 22.59 trillion, a 4.52% year-on-year increase.
On a month-over-month basis, the central government’s debt increased by PKR 1.11 trillion between April and May, slightly higher than the PKR 1.035 trillion rise recorded during the same period last year.
A significant portion of the new debt came from long-term instruments. Debt raised through the auction of Pakistan Investment Bonds (PIBs) surged to PKR 35.24 trillion, up from PKR 27.70 trillion in May 2024.
In contrast, borrowing via Market Treasury Bills (MTBs) declined to PKR 8.04 trillion, down PKR 1.40 trillion from last year’s PKR 9.44 trillion. This shift signals the government’s intent to reduce reliance on short-term borrowing in favor of longer-term obligations, providing greater fiscal breathing room for development spending.
Despite the overall increase in debt, the government has taken steps to improve debt sustainability. The average repayment period of domestic debt has extended from 2.7 years to 3.75 years, easing short-term repayment pressures.
Additionally, institutional participation has diversified, with pension funds and insurance companies joining banks in investing in government bonds, an effort to deepen the local investor base and spread financial risk.
Finance Minister Senator Muhammad Aurangzeb described the developments as a “major step forward” in strengthening Pakistan’s financial resilience. “We are introducing new, smart ways of borrowing that reduce risk and give investors more options,” he said. “Our aim is to manage public debt responsibly, promote Islamic finance, and attract more long-term investment to support the country’s economic growth.”
The Ministry of Finance is also developing new savings products, particularly Islamic government bonds, to expand financial inclusion and encourage ordinary citizens to invest in national savings schemes.
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