Pakistan government plans to raise PKR 6,750 billion in three months

Pakistan government plans to sell PKR 6,750 billion worth of treasury bills and investment bonds during March and May amid rising debt levels.

State Bank of Pakistan (SBP) will raise PKR 3,650 billion through Treasury bill (T-bill) auctions between March and May, with seven auctions scheduled during this period.

Additionally, the government will conduct three Pakistan Investment Bonds (PIBs) auctions, each targeting PKR 350 billion, totaling PKR 1,050 billion. Floating-rate PIBs will also be auctioned, aiming to raise PKR 2,050 billion across seven auctions.

The federal government’s total debt stock surged by over PKR 3,200 billion in the first seven months of the fiscal year 2024-25, primarily due to significant domestic borrowing to bridge the fiscal deficit.

According to the State Bank of Pakistan (SBP), the central government’s total debt, encompassing both domestic and external liabilities, increased by 4.65% during this period.

By the end of January 2025, Pakistan's overall debt stock reached PKR 72,123 billion, up from PKR 68,914 billion in June 2024. Domestic borrowing played a key role in this rise, climbing by 6.5%.

Economic forecasts for the fiscal year vary. BMI, a Fitch Solutions company, projects GDP growth at 3.2%, while the Asian Development Bank (ADB) estimates growth at 2.4% for 2024 and 2.8% for 2025.

The International Monetary Fund (IMF) offers a more optimistic outlook, predicting 3.5% growth for FY2024-25. The SBP, in its State of the Economy report, expects GDP growth to range between 2.5% and 3.5%, supported by lower borrowing costs and a gradual recovery in manufacturing and services sectors.