ISLAMABAD – Pakistan’s central government debt surged by nearly Rs5,750,000,000,000 in fiscal year 26, showing the continued dependence on borrowing even as tax revenues improved and fiscal pressures showed signs of easing.
Data by central bank shows central government debt reached around Rs83.64 trillion by end of June 2026, up 7.4 percent from around Rs77.89 trillion a year earlier. The latest figure shows massive addition to the government’s outstanding obligations within a single fiscal year. The SBP maintains official debt and liabilities datasets covering government domestic debt, external debt and related measures.
The striking feature of the latest debt build-up is where the money came from: domestic borrowing did most of the heavy lifting. Government domestic debt increased by roughly Rs4.97 trillion, or around 9 percent, taking the stock to approximately Rs59.4–59.9 trillion. External debt rose much more slowly, increasing by about 3 percent to nearly Rs24.2 trillion.
Pakistan’s latest debt expansion was driven overwhelmingly by borrowing at home rather than a comparable surge in foreign obligations. The increase came despite a stronger revenue performance.
Pakistan’s debt burden has expanded sharply over the past years, although the rate of increase has moderated. Gross public debt under the broader SBP definition, which includes domestic and external government debt as well as IMF-related debt, hovering at around Rs86.71 trillion in FY26, compared with Rs80.52 trillion in FY25.
From around Rs49.24 trillion in FY22, gross public debt climbed to roughly Rs86.71 trillion by FY26 — an increase of more than Rs37 trillion in four years.
Pakistan is estimated to have posted a primary budget surplus for the third consecutive year, while the overall fiscal deficit is expected to have narrowed substantially from the previous fiscal year. That improvement gives policymakers some room to argue that the country is moving toward greater fiscal discipline.
But the debt numbers demonstrate that fiscal consolidation has not yet eliminated the government’s financing needs. For FY27, Islamabad has set an ambitious target of a primary surplus equal to 2 percent of GDP, while aiming to bring the overall fiscal deficit down to 3.6 percent of GDP.
