Strong fiscal discipline, domestic borrowing strategy, and debt management operations help contain public debt growth during FY 2026.
ISLAMABAD: Pakistan’s total public debt stood at Rs 83,285 billion by the end of March 2026, reflecting a moderate rise in overall liabilities. The debt stock included Rs 57,566 billion in domestic debt and Rs 25,720 billion in external debt, while external public debt was recorded at US $92.2 billion.
During the first nine months of FY 2026, debt growth remained contained at 3.4 percent compared to 6.7 percent in the same period last year, supported by a strong primary surplus, disciplined borrowing, and active debt management operations.
On the domestic front, the government largely relied on medium- to long-term financing instruments such as Pakistan Investment Bonds (PIBs) and Government Ijarah Sukuk to fund the fiscal deficit, which was fully financed through internal sources.
A notable development was the successful launch of a 15-year zero-coupon PIB that raised Rs 263 billion, helping improve the maturity profile of debt. As a result, the Average Time to Maturity increased from 3.5 years in March 2025 to 3.86 years in March 2026.
Strong investor participation was observed in domestic debt auctions. Treasury Bills attracted bids of Rs 31,767 billion with Rs 13,443 billion accepted, while PIBs received Rs 22,507 billion in bids with Rs 5,303 billion accepted.
Government Ijarah Sukuk, including Bai-Muajjal structures, drew Rs 6,635 billion in bids with Rs 2,250 billion accepted, reflecting sustained market confidence.
The government also conducted liability management operations, including buybacks of around Rs 2.1 trillion in debt securities to reduce servicing costs.
Additionally, the introduction of a 10-year zero-coupon Sukuk helped expand Shariah-compliant financing, with total Sukuk issuance reaching Rs 2.25 trillion. The share of Islamic instruments rose from 12.7 percent to 14.5 percent, improving diversification in the debt portfolio.
Risk indicators also showed improvement as the share of fixed-rate debt increased significantly from 19.0 percent to 27.6 percent, reducing exposure to interest rate volatility.
Meanwhile, external budgetary inflows totaled US $6.1 billion, including multilateral, bilateral, Naya Pakistan Certificates, and commercial bank financing, along with US $1.2 billion from the IMF. Overall, the external debt portfolio remained largely concessional, supporting long-term sustainability.
