Pakistan Broadens Public Debt Maturity to 3.8-Year Average

Pakistan has extended the average maturity of its public debt to 3.8 years as of June 2026, compared with 2.7 years in June 2024, as the government seeks to reduce refinancing risks and spread repayment obligations over a longer period.

According to the Ministry of Finance, the government aims to increase the average debt maturity further to 4.2 years by June 2028 through longer-term borrowing, diversified financing sources, and improved debt management. However, Pakistan still faces significant repayment obligations, with domestic public debt principal repayments estimated at Rs. 17 trillion in FY2027, excluding Treasury Bill rollovers, while external principal repayments are projected at Rs. 4.531 trillion.

Pakistan’s total public debt increased by Rs. 6.2 trillion to Rs. 86.7 trillion by June 2026. However, the growth rate slowed to 7.7% in FY2026 from 12.9% in FY2025. The Finance Ministry said fiscal consolidation and improved debt management have helped keep gross financing needs around 20% of GDP.

Meanwhile, government interest expenditure declined by 22% year-on-year in FY2026, resulting in savings of Rs. 1.939 trillion. Pakistan also recorded a primary surplus of Rs. 2.185 trillion, while the federal fiscal deficit narrowed to Rs. 4.763 trillion from Rs. 7.089 trillion in the previous fiscal year.

The Finance Ministry said exchange rate stability has also helped limit the impact of foreign currency valuation adjustments on public debt. The government expects longer-maturity borrowing instruments, fiscal discipline, and diversified financing sources to reduce refinancing pressures and manage future debt repayments.

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