Domestic borrowing drives a 11.4% annual increase as long-term obligations surge and analysts warn fiscal pressures remain elevated
Pakistan’s central government debt rose 0.5% month-on-month to PKR 77 trillion in October, an 11.4% increase from PKR 69.1 trillion a year earlier, according to State Bank of Pakistan data.
The increase was driven largely by domestic borrowing, which climbed 1% from September to PKR 53.98 trillion, up 14.3% from PKR 47.23 trillion in October 2024.
Within domestic obligations, long-term debt rose 1.2% month-on-month to PKR 45.49 trillion, a 23% jump from last year.
Permanent debt, which includes federal government bonds, also increased 1.2% to PKR 41.98 trillion, up 24.3% year-on-year.
Federal government bonds accounted for PKR 41.08 trillion, rising 24.9% from October 2024.
Short-term domestic debt fell 17.4% from a year earlier to PKR 8.41 trillion and was little changed month-on-month.
Naya Pakistan Certificates, a key instrument used to attract overseas inflows, grew 25.7% from September to reach PKR 79 billion.
External central government debt stood at PKR 23 trillion, up 5.1% year-on-year but 0.8% lower than in September.
Analysts said the persistent rise underscores the government’s heavy financing needs. "The steady buildup in debt reflects ongoing fiscal pressures, especially as the state relies on long-term domestic instruments to manage cash flows," said a Karachi-based analyst.
"Without stronger revenue growth or reduced borrowing requirements, this upward trajectory is likely to continue."
Trend data shows a consistent increase in total central government debt over the past year, highlighting continued strain on public finances.
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