Adviser to the Finance Minister Khurram Schehzad on Tuesday announced Pakistan retired Rs. 2.9 trillion of debt ahead of schedule during fiscal year 2025-26, 62% higher than the Rs. 1.8 trillion it retired similarly in FY25.
Of the total retired in FY26, he said, 51% comprised central bank debt while the remaining 49% was market debt. He described the process as active liability management, not routine debt repayment. This approach, he stressed, was helping Pakistan reduce refinancing and rollover risks; lower debt servicing costs and generate taxpayer savings; optimize liquidity and cash flow management; and strengthen investor confidence and fiscal resilience.
At the same time, said Schehzad in a post on X, the government’s debt profile has also improved, with the average debt maturity increasing from 2.7 years in FY24 to more than 3.8 years in FY26. Similarly, the country’s debt-to-GDP ratio has declined from 75% in FY23 to around 68.5% in FY26, while reliance on central bank financing has been reduced significantly.
Detailing the early debt retirement timeline, he said Rs. 826 billion was retired in October 2024; Rs. 200 billion in November 2024; Rs. 273 billion in March 2025; Rs. 500 billion in June 2025; Rs. 1,133 billion in August 2025; Rs. 122 billion in November 2025; Rs. 494 billion in December 2025; Rs. 300 billion in January 2026; Rs. 595 billion in April 2026; and Rs. 279 billion in May 2026.
The adviser to the finance minister said this was part of a broader transformation in Pakistan’s public finances. Alongside moderate inflation, stronger fiscal and external balances, and improving macroeconomic stability, proactive debt management is helping build a more resilient, sustainable, and credible fiscal framework, he said.
“This is disciplined debt management—delivering lower risk, lower costs, and stronger public finances,” he maintained. The government was now shifting from short-term borrowing toward proactive balance-sheet management focused on reducing financial risks, lowering borrowing costs, and supporting long-term fiscal sustainability, he added.