Country achieves early retirement of Rs1.5trn public debt in FY25
This substantial early repayment has contributed to a notable improvement in Pakistan's fiscal indicators, bringing the debt-to-GDP ratio down from 75 percent in FY23 to 69 percent in FY25.
'In another bold and unprecedented step toward fiscal responsibility, the Ministry of Finance, Government of Pakistan, has successfully retired Rs 500 billion in debt owed to the State Bank of Pakistan (SBP- a full four years ahead of its scheduled maturity in 2029,' Khurram Schehzad Advisor to Finance Minister revealed on social platform X.
Public debt recorded at Rs76,007bn by end-March
This early retirement of central bank debt, executed by the Debt Management Office (DMO), marks a major breakthrough in Pakistan's debt management strategy. 'Early debt retirement while converting shorter-tenure with longer-tenure debt, significantly reduces concentration risk, lowers future liabilities, and strengthens the country's macroeconomic foundations by curbing reliance on borrowing,' he added.
More importantly, he said that it reflects the government's strong commitment to proactive, disciplined, and forward-looking financial governance.
This latest achievement builds on an earlier milestone- the successful buyback of Rs 1 trillion in market debt completed by December 2024- the first such operation in Pakistan's history. Combined, these two strategic actions amount to the early retirement of R 1.5 trillion in public debt in FY25, sending a strong signal of economic confidence and reform.
In a historical move, with improved liquidity position the federal government conducted the first buyback auction of government securities during the first half of last fiscal year to reduce the debt burden. The Rs 3 trillion profit of SBP, transferred to the federal government, has eased the financial burden, and make cushion to retired the public debt, he said.
He mentioned that with these early retirements of debt, Pakistan's debt-to-GDP ratio declined by 6 percent in the last two years from 75 percent in FY23 to 69 percent in FY25. In addition, it has extended the average time to maturity (ATM) of public debt from 2.70 to around 3.75 years. These early payments have also lowered refinancing risks and freeing up fiscal space for development priorities.
Moreover, by capitalising on the sharp decline in interest rates- combined with disciplined borrowing, timely repayments, and strategic refinancing- the government has achieved an extraordinary Rs 830 billion in interest cost savings in FY25, Schehzad informed. 'This is more than just debt reduction; it is decisive, forward-looking economic management, aimed at building a resilient, credible, and fiscally sustainable Pakistan.'
Copyright Business Recorder, 2025
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Express Tribune
6 hours ago
- Express Tribune
Software body demands predictable tax system
Listen to article The Pakistan Software Houses Association (P@SHA) has called on the government to come up with a long-term, predictable tax and compliance framework for the technology and IT-enabled services (ITeS) sector. P@SHA's "Continuity & Consistency" reform package, delivered to the Ministry of Finance ahead of the Finance Bill, lays out some changes that will slash compliance costs, bring tens of thousands of remote digital workers into the formal tax net and catalyse domestic and foreign investment into Pakistani tech firms. "Every serious investor, local or international, asks the same two questions: what will my tax exposure be and will the rules change after I invest?" said the association chairman in a statement issued on Saturday. "Right now, innovators spend too much time navigating overlapping regimes and too little time building export products. If we hard-code continuity and make compliance near effortless, capital will move to Pakistan." The association has proposed a number of priority actions to the government for early adoption. These include the continuation of the 10-year final tax regime for IT/ITeS export income, removal of discrepancies in tax rates where Pakistani IT companies get penalised for running payrolls from the country, creation of a Roshan Digital Account-style channel for the IT sector for quick foreign currency receipts, transparent conversion, optional retention, straight-through data to the Federal Board of Revenue (FBR), rationalisation of super tax, exemption from capital gains tax to secure investor confidence, harmonisation of provincial sales tax on services and removal of duplicating labour-linked levies (Employees Old-age Benefits Institution, Sindh Employees Social Security Institution, Punjab Workers Welfare Fund and overlapping provincial labour rules) or consolidate them via a single digital window tailored for knowledge workers. P@SHA asserted that the requested changes were not subsidies; rather they would promote digitalisation and lead to administrative simplification.
Business Recorder
12 hours ago
- Business Recorder
Business activities remain normal in twin cities
ISLAMABAD: The business activities remained normal in the twin cities of Islamabad and Rawalpindi, as businessmen did not observe a shutter down strike against the extraordinary powers of the Federal Board of Revenue (FBR) to make arrests under Finance Act 2025. The tax-related issues concern the implementation of the Finance Act 2025, including arrest powers under 37A of the Sales Tax Act, payment of Rs200,000 through cash, e-bility, and other enforcement provisions introduced under the Finance Act 2025. Shops and businesses remained open in all the key and local areas including main Murree Road, Saddar, Satellite Town and old city. Meanwhile, President Islamabad Chamber of Commerce and Industry (ICCI) Nasir Qureshi was of the view that the business community of the federal capital did not support the strike call. 'We have had discussion with Haroon Akhtar, SAPM on industries and he has assured to take up the matter with the PM - therefore, it's our responsibility to wait for a few days to see the outcome of his assurances,' he added. The 12-member committee has been constituted under the Chairmanship of Haroon Akhtar Khan, Special Assistant to the Prime Minister on Industries and Production. The committee also included Minister of State for Finance Bilal Azhar Kayani, PM's Coordinator on Trade Rana Ehsan Afzal Khan, FBR Chairman Rashid Mehmood Langrial, and representatives nominated by the business community and chambers of commerce. The committee will hold detailed deliberations over the next 30 days and present a consensus-based and workable solution to the prime minister and the federal cabinet. The business community openly shared their concerns and suggestions during the meeting, and the government expressed its commitment to take all stakeholders into confidence. It was agreed that every effort would be made to address traders' concerns related to transactions and to avoid causing any difficulties for the business community. Meanwhile, President All Pakistan Anjuman-e-Tajiran Ajmal Baloch said that the traders will hold protest demonstrations across the country on July 26 against new amendments in the finance bill. 'We are waiting for the reply from PM Office, and in the meantime our token protest will be held as per schedule, in the second phase we will go for token shutter down strikes,' Baloch said. He slammed the bureaucracy and said that they work with deception, and if the government failed to take back the new powers given to FBR officers, we will increase pressure. Copyright Business Recorder, 2025
Business Recorder
12 hours ago
- Business Recorder
Islamabad: prices of essential kitchen items show rising trend
ISLAMABAD: The prices of essential kitchen items have witnessed an increase during this week past against the previous week owing to third successive increase in petrol and diesel prices, revealed a survey carried out by Business Recorder here on Saturday. Within the past one and half month, the government has increased the price of High Speed Diesel (HSD) oil mainly used for transportation purposes from trains to trucks, buses and trailers by Rs29 per litre and petrol mainly used by private and small vehicles by Rs19 per litre. The increase in fuel prices has played a major role in escalating the prices as transportation cost has jumped up by at least 10 per cent during the period which not only resulted in increasing the prices of daily use items but also edible items from vegetables, meat, eggs to fruits. An increase was noted in chicken prices as it went up from Rs16,000 to Rs16,400 per 40kg in the wholesale market, which in retail is being sold at Rs440 per kg and chicken meat at Rs700 per kg. Eggs' price went up from Rs7,000 to Rs7,300 per carton of 30 dozen which in retail is being sold in the range of Rs260-275 against Rs250-260 per dozen. Sugar price went down from Rs9,100 to Rs8,800 per 50kg bag in the wholesale market, while in retail it is being sold at 190 per kg. Wheat flour price remained unchanged as the best quality wheat flour ex-mill price per 15kg bag is at Rs1,100 which in retail is being sold at Rs1,150 per 15kg bag and normal quality wheat flour per 15kg bag is available at Rs1,000 which in retail is being sold at Rs1,050 per bag. Copyright Business Recorder, 2025
