KARACHI: The government said on Saturday it expected slower growth in public debt in the current fiscal year amid a stabilizing economy, as it rejected claims that Pakistan’s overall debt had doubled in the past three years.
Officials have repeatedly said the country’s macroeconomic indicators have improved markedly since mid-2023, when Pakistan narrowly avoided a sovereign default and secured a short-term International Monetary Fund (IMF) loan with tough reform conditions.
The economy’s recovery has since been recognized by multilateral lenders and credit rating agencies. Yet, some social media posts were creating a misleading impression that Pakistan’s debt burden had doubled since 2022, according to Khurram Schehzad, an advisor to the finance minister.
“The central government’s debt stood at PKR 80 trillion [$280 billion] as of June 2025,” Schehzad said in a statement, adding that contrary to claims that it had doubled, the debt stock had only increased "by PKR 31 trillion [$108.5 billion] between FY22-25, from PKR 49 trillion [$171.5 billion] to current PKR 80 trillion [$280 billion].”
He pointed out annual debt growth that once ran as high as 23 percent in FY22 and 28 percent in FY23 had eased to about 13 percent in FY24 and FY25, crediting a record primary budget surplus and the country’s early repayments of more than Rs2.6 trillion ($9.1 billion) within the last 11 months.
Schehzad also pointed to other signs of stabilization, saying the share of external debt had fallen to 32 percent of the total, reducing vulnerability to swings in the rupee, while in dollar terms external debt has inched up by only $2.9 billion over three and a half years.
Strong remittances of $38 billion and current account surpluses further underpinned the currency, he added.
He said Pakistan’s debt-to-GDP ratio has declined to around 70 percent from 77 percent in FY20, while interest costs dropped by Rs850 billion ($3 billion) in FY25 alone, helping shrink the federal fiscal deficit to Rs7.1 trillion ($24.9 billion), below the budgeted Rs8.5 trillion ($29.8 billion).
"With the economy stabilizing — as evidenced by rating upgrades from international agencies and a stable currency, FY26 is expected to see a further limitation in debt growth and continued fiscal improvement," he added.
