Pakistan’s debt nears PKR 80 trillion amid borrowing pressures

Pakistan’s central government debt rose sharply in February, increasing 9.37% year-on-year to PKR 79.88 trillion, up from PKR 73.04 trillion in the same month last year, according to data released by the State Bank of Pakistan.

On a month-on-month basis, total debt edged up 0.7% from PKR 79.33 trillion recorded in January 2026, reflecting continued borrowing pressures.

The increase in the debt burden was primarily driven by higher borrowing from both domestic and external sources to finance the country’s fiscal deficit.

Domestic debt accounted for the largest share, reaching PKR 56.68 trillion. This included PKR 47.48 trillion in long-term debt, PKR 9.13 trillion in short-term obligations and PKR 67 billion raised through Naya Pakistan Certificates.

The central bank data showed domestic debt grew 11.09% compared to a year earlier and rose 1.24% from the previous month.

Long-term domestic debt climbed 11.14% year-on-year to PKR 47.48 trillion in February, up from PKR 42.72 trillion a year earlier, while posting a 0.75% monthly increase. Short-term debt also rose significantly, increasing 10.95% year-on-year to PKR 9.13 trillion.

Among long-term instruments, Pakistan Investment Bonds remained the dominant component at PKR 35.36 trillion, registering an 8.61% annual increase and a 0.24% monthly rise. In the short-term category, Market Treasury Bills led borrowing at PKR 9.01 trillion, up 10.72% year-on-year and 4.04% month-on-month.

In contrast, borrowing through Naya Pakistan Certificates declined 4.29% year-on-year to PKR 67 billion. On a monthly basis, inflows through the certificates fell 6.94% compared to PKR 72 billion in January.

A breakdown of external debt showed PKR 19.28 trillion in long-term loans and PKR 3.92 trillion in short-term liabilities.