Pakistan’s Public Debt Nears Rs91 Trillion by June 2026
Pakistan’s public debt, including publicly guaranteed debt, rose by Rs6.21 trillion in one year to reach Rs90.98 trillion by the end of June 2026. The figure stood at Rs84.77 trillion in June 2025, an increase of 7.3 per cent over the year.
A senior Finance Ministry official confirmed the increase. The official also pointed to a change that runs in the opposite direction: the debt-to-GDP ratio fell by 2.6 percentage points, from 74.3 per cent to 71.7 per cent, because the economy grew faster in nominal terms than the debt stock.
That distinction matters for readers. A rising debt total does not, on its own, tell the full story. When national income grows faster than borrowing, the burden of debt relative to the size of the economy can fall even as the amount owed rises.
Pakistan’s public debt: domestic borrowing drove most of the increase
Domestic debt accounted for most of the rise. It grew by Rs4.93 trillion, from Rs56.7 trillion to Rs61.65 trillion. The official linked that increase to changes in interest rates, since a large share of domestic debt carries floating rates.
Only 27 per cent of government securities are on fixed rates. The average time to maturity of domestic debt is about 3.8 years, but its average time to re-fixing is just 1.4 years. In plain terms, a large part of domestic borrowing reprices quickly when interest rates move, which leaves the budget exposed to rate swings.
External debt grew by Rs1.29 trillion, from Rs28.06 trillion to Rs29.35 trillion. Its profile looks different. About 60 per cent of external debt is on fixed rates, 90 per cent is long term, and its average time to maturity is more than six years. That longer, more fixed profile gives the external side more stability than the domestic side.
Debt excluding guarantees also rose
Total public debt, excluding guarantees, stood at Rs86.7 trillion. That was up Rs6.2 trillion, or 7.7 per cent, from Rs80.5 trillion a year earlier. Its ratio to GDP fell from 70.6 per cent to 68.3 per cent.
The official credited nominal GDP growth, a federal primary surplus of Rs2.18 trillion, and debt buybacks for the fall in the ratio. A primary surplus means the government took in more than it spent before interest payments, which helps slow the growth of debt.
Interest payments fell sharply over the same period. They dropped by Rs1.94 trillion, or 21.7 per cent, from Rs8.88 trillion in the 2024-25 fiscal year to Rs6.95 trillion in 2025-26. Lower interest costs free up room in the budget, but the floating-rate structure of domestic debt means that relief can reverse if rates rise again.
Outstanding government guarantees totalled Rs4.28 trillion. Guarantees are promises the government has made on behalf of other entities, and they sit on top of direct public debt in the headline Rs90.98 trillion figure.
Why the floating-rate mix deserves attention
The most important detail in the new figures is not the headline total. It is the mix. With only about a quarter of domestic government securities on fixed rates, and repricing in just over a year on average, domestic interest costs can move fast.
That is why the fall in interest payments last year should be read with care. It reflects the conditions of that year, including the primary surplus and buybacks, rather than a permanent change in the debt structure. If rates rise, a large share of domestic debt will reprice within a short period.
For households, the link is indirect but real. Higher interest costs for the government leave less room for development spending, subsidies and tax relief. A lower debt-to-GDP ratio, on the other hand, gives the government more room to borrow in a crisis without pushing the ratio back to earlier highs.
The figures cover the year to June 2026. The next test will be whether the government can keep the primary surplus, lengthen the maturity of domestic borrowing, and raise the share of fixed-rate debt, so that the ratio keeps falling even if interest rates move.
Frequently asked questions
How much was Pakistan’s public debt in June 2026?
Public and publicly guaranteed debt reached Rs90.98 trillion by the end of June 2026, up from Rs84.77 trillion in June 2025.
Why did the debt-to-GDP ratio fall if debt rose?
Nominal GDP grew faster than the debt stock, so the ratio fell by 2.6 percentage points to 71.7 per cent, even though the amount owed increased.
What drove the increase?
Domestic debt rose by Rs4.93 trillion to Rs61.65 trillion, and external debt rose by Rs1.29 trillion to Rs29.35 trillion.
How much did interest payments fall?
Interest payments fell by Rs1.94 trillion, or 21.7 per cent, from Rs8.88 trillion in 2024-25 to Rs6.95 trillion in 2025-26.
Why does the fixed-rate share matter?
Only 27 per cent of domestic government securities are on fixed rates, and domestic debt reprices in 1.4 years on average, so interest costs can rise quickly if rates move.
