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Business Recorder
08-07-2025
- Business
- Business Recorder
Pakistan achieves early retirement of Rs1.5trn public debt in FY25
KARACHI: In a significant economic achievement, the government of Pakistan has demonstrated its firm commitment to fiscal discipline and long-term stability by retiring Rs 1.5 trillion in public debt ahead of schedule 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
Business Recorder
08-07-2025
- Business
- Business Recorder
Country achieves early retirement of Rs1.5trn public debt in FY25
KARACHI: In a significant economic achievement, the government of Pakistan has demonstrated its firm commitment to fiscal discipline and long-term stability by retiring Rs 1.5 trillion in public debt ahead of schedule 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
Business Recorder
11-06-2025
- Business
- Business Recorder
Rs8.2trn will be spent on debt servicing
ISLAMABAD: The country will spend around Rs 8.206 trillion on debt servicing including interest payments and retiring the principal as and when due during next financial year 2025-26 which is 46.7 percent of total budget outlay of Rs 17.573 trillion. The government has earmarked Rs 8.206 trillion in the budget 2025-26 a mark-up against Rs 9.775 trillion for the current fiscal year which was later revised to Rs8.945 trillion. Next fiscal year the country will pay Rs1.009 trillion as mark-up on foreign debt against the revised estimates of Rs 1.038 trillion. Public debt recorded at Rs76,007bn by end-March The budget allocates Rs 7.197 trillion on domestic mark up in 2025-26 against Rs8.736 trillion in 2024-25 which was revised down to Rs 7.906 trillion. Pakistan's total public debt was recorded at Rs 76,007 billion end-March 2025, registering an increase of Rs4,761 billion (6.7 percent) during first nine months of current fiscal year, as it was Rs 71,246 billion on June 30, 2024. Copyright Business Recorder, 2025
