Pakistan's debt hits Rs 90.98 trillion: up Rs 6.21 trillion in a year, but interest bill falls 21.7%

Pakistan's total debt, counting public and publicly guaranteed loans, stood at Rs 90.98 trillion at the end of June 2026, up Rs 6.21 trillion (7.3%) from Rs 84.77 trillion a year earlier, a senior Finance Ministry official said, as first reported by ProPakistani on 3 November.

The headline number grew, but the economy grew faster. Measured against nominal GDP, the debt burden fell 2.6 percentage points, from 74.3% to 71.7%.

Pakistan debt 2026: where the Rs 6.21 trillion came from

Domestic loans account for about four rupees in every five of the increase. Public debt alone, without guarantees, fell from 70.6% to 68.3% of GDP. Outstanding government guarantees totalled Rs 4.28 trillion, split almost evenly between domestic (Rs 2.23 trillion) and external (Rs 2.24 trillion).

Why the interest bill fell by Rs 1.94 trillion

The biggest change for the budget is on the cost side. Interest payments dropped from Rs 8.88 trillion in FY25 to Rs 6.95 trillion in FY26, a fall of 21.7%.

The reason is the shape of domestic debt. Only 27% of government securities carry a fixed rate. The average domestic loan matures in about 3.8 years, but its rate resets every 1.4 years on average, so when the State Bank cut the policy rate, the government's borrowing costs followed quickly. The policy rate now stands at 12% (see our policy rate page). The same exposure works in reverse: a rate rise would push the bill back up within months.

External debt is steadier. About 60% of it is on fixed rates, 90% is long term and its average maturity is over six years.

The official credited three things for the lower debt ratio: nominal GDP growth, a federal primary surplus of Rs 2.18 trillion, and debt buybacks.

What it means for you

• Savings and deposits. Because most government debt reprices within about a year and a half, the yields that drive bank deposit and National Savings rates follow the policy rate closely. You can check what a deposit earns at today's rates with our National Savings calculator.
• Taxes. Rs 6.95 trillion in interest is still the single largest item the federal government pays for, which is why the tax net keeps widening. Our income tax calculator shows what this year's slabs take from a salary.
• The rupee. External debt rose by a smaller Rs 1.29 trillion, part of which reflects the exchange rate. The dollar is at Rs 276.72 on the dollar rate page.

The government recently said it is looking at tokenising part of its Eurobond debt, pending cabinet approval, as one way to widen the pool of buyers.