KARACHI: Pakistan’s government debt decreased by Rs908 billion, or 1.16 per cent, to Rs76.98 trillion in the first four months of the current fiscal year, data from the State Bank of Pakistan (SBP) showed on Thursday.
However, by the end of October, the debt saw a slight increase of 0.5 per cent compared to the previous month, and it rose by 11.4 per cent compared to October 2024.
Domestic debt reached Rs53.976 trillion at the end of October, reflecting a year-on-year increase of 14.3 per cent. It increased by 1.0 per cent month-on-month (MoM) but saw a 0.91 per cent decline compared to June, primarily due to a reduction in the government’s domestic borrowing needs.
External debt stood at Rs23 trillion by the end of October, up 5.1 per cent from a year earlier. However, foreign debt decreased by 0.8 per cent compared to the previous month and showed a 1.76 per cent reduction since June, attributed to limited external inflows and moderated short-term repayments.
Analysts said the government’s debt decreased due to a record quarterly budget surplus in the first quarter of this fiscal year. Pakistan recorded a fiscal surplus of 1.6 per cent of GDP, or Rs2.1 trillion, in July-September FY26, compared to a surplus of 1.7 per cent during the same period last year, thanks to receiving substantial profits of Rs2.42 trillion from the central bank. The SBP reported higher-than-average profits and dividends in FY25 due to record-high open market operation positions.
However, the government’s revenue collection has been weak in the first four months of the current fiscal year. The Federal Board of Revenue (FBR) fell short of its collection target by nearly Rs274 billion during July to October of FY26, primarily due to a decline in domestic sales tax revenue.
Between July and October, the FBR collected Rs3.835 trillion, missing the target of Rs4.108 trillion. However, this amount represents a 12 per cent increase compared to the Rs3.834 trillion collected during the same period last year.
