Pakistan Public Debt Maturity Reaches 3.8 Years
Pakistan has stretched the average maturity of Pakistan public debt to 3.8 years, giving the government more time to repay what it owes and easing the pressure of refinancing.
The average maturity stood at 3.8 years as of June 2026, up from 2.7 years in June 2024, the Ministry of Finance said. The ministry aims to push it further to 4.2 years by June 2028, as part of a shift towards longer-term borrowing.
Longer maturity means fewer loans fall due at once. The government can spread repayments over more years instead of returning to the market again and again to roll over short-term debt. That lowers the risk that a bad month in the markets leaves it unable to refinance on time.
Pakistan public debt reaches Rs86.7 trillion
The breathing room comes with a large bill still attached. Total public debt rose by Rs6.2 trillion to Rs86.7 trillion by June 2026. The pace of accumulation has slowed, with the debt stock growing 7.7 per cent during FY2026 against 12.9 per cent in FY2025.
Even so, the repayments ahead are heavy. Domestic debt principal repayments are estimated at Rs17 trillion in FY2027, excluding the rollover of Treasury Bills. External principal repayments are projected at another Rs4.531 trillion.
The Finance Ministry expects gross financing needs to stay at around 20 per cent of GDP. It credited fiscal consolidation and better debt management with keeping those needs in check.
The picture on interest payments has improved sharply. Government interest expenditure fell 22 per cent year on year during FY2026, saving Rs1.939 trillion against the previous year. Lower interest payments, along with continued fiscal consolidation, helped Pakistan record a primary surplus of Rs2.185 trillion.
The federal fiscal deficit also narrowed to Rs4.763 trillion in FY2026 from Rs7.089 trillion in FY2025. The ministry linked the improvement to tighter budgets and a more stable exchange rate, which limited the impact of foreign currency swings on the rupee value of external debt. In FY2022 and FY2023, depreciation of the rupee had significantly increased that value, adding to the debt burden.
Why longer maturities matter for Pakistan
Average maturity is one of the most watched numbers in debt management. When most borrowing is short-term, the government must repay or refinance large sums every few months. Any shock, a revenue shortfall, a spike in interest rates or a delay in foreign inflows, can turn into a crisis.
Stretching maturities to 3.8 years spreads that risk. It does not reduce the debt itself, and the Rs17 trillion due in FY2027 shows how large the near-term bill remains. But it gives the treasury more room to plan and less exposure to sudden changes in borrowing costs.
The shift also fits with what investors have been doing. Foreign investors put $747 million into Pakistan’s government bonds and treasury bills in the first four months of FY2027, drawn by returns that are among the highest in the region. Those inflows depend on confidence that Pakistan can service its debt on time.
The World Bank is watching the same question. It has rated its $600 million operation under the $1.7 billion public resource programme as moderately satisfactory, while flagging slow reform progress and breaches of tariff conditions. The next $200 million tranche is being approved for the Khyber-Pakhtunkhwa government.
Exports are part of the same balance. Pakistan’s sales to the United States rose in the first quarter of FY2027, but imports surged far faster, widening the trade gap. Neighbouring Bangladesh faces its own debt strain, with external debt above $113 billion.
The government expects continued fiscal discipline, longer-maturity borrowing and diversified financing sources to help manage the repayments ahead, cut refinancing pressure and contain further growth in public debt. ProPakistani reported the Finance Ministry figures on Tuesday.
Frequently asked questions
What is the average maturity of Pakistan’s public debt?
It reached 3.8 years as of June 2026, up from 2.7 years in June 2024. The Finance Ministry aims to raise it further to 4.2 years by June 2028.
How much public debt does Pakistan have?
Total public debt stood at Rs86.7 trillion by June 2026, up Rs6.2 trillion over the year. The debt stock grew 7.7 per cent in FY2026, against 12.9 per cent in FY2025.
What repayments fall due in FY2027?
Domestic debt principal repayments are estimated at Rs17 trillion, excluding the rollover of Treasury Bills. External principal repayments are projected at another Rs4.531 trillion.
Why did interest payments fall?
Government interest expenditure declined 22 per cent year on year in FY2026, saving Rs1.939 trillion. Lower rates and fiscal consolidation helped, and Pakistan recorded a primary surplus of Rs2.185 trillion.
What is the federal fiscal deficit now?
The federal fiscal deficit narrowed to Rs4.763 trillion in FY2026 from Rs7.089 trillion in FY2025.
