Pakistan has achieved a historic milestone by repaying large-scale domestic debt ahead of schedule in fiscal 2026, demonstrating stronger fiscal management, economic discipline, and a commitment to long-term financial stability.
According to the Ministry of Finance, early debt repayments in the current fiscal year were 44% higher than those in fiscal 2025, highlighting a significant acceleration in government efforts to manage public liabilities efficiently.
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Adviser to the Finance Minister Khurram Shehzad stated that the government repaid Rs3,654 billion in domestic debt within just 14 months, including Rs2,150 billion cleared ahead of schedule between July 2025 and January 2026.
Officials added that the latest transaction involved Rs300 billion paid to the State Bank of Pakistan, with 65% of early repayments going to the central bank, 30% to treasury bills, and 5% to Pakistan Investment Bonds.
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As a result, outstanding debt to the central bank fell from over Rs5,500 billion to around Rs3,000 billion, and the debt-to-GDP ratio decreased from 74% to nearly 70%, saving approximately Rs850 billion in fiscal 2025.
Economists believe the enhanced fiscal space could support infrastructure projects, create new jobs, boost investor confidence, and attract higher levels of foreign investment, contributing positively to Pakistan’s economic growth trajectory.