Pakistan has achieved a rare financial milestone as the Ministry of Finance confirmed early repayment of Rs2,600 billion in Pakistan debt. This is the first time in the country’s history that such a massive repayment has been made ahead of schedule.
Officials highlighted that the nation’s debt position has become more sustainable than in earlier years. They credited effective debt management strategies and falling interest rates for reducing the overall borrowing burden. Because of these measures, the country saved Rs850 billion in interest payments during the current year.
The government had earmarked Rs8.2 trillion for interest servicing in the ongoing fiscal year. Last year, the allocation stood at Rs9.8 trillion. This shift reflects a major improvement in financial discipline and shows the government’s stronger ability to manage the national debt.
The Ministry further explained that the debt-to-GDP ratio has also improved. It was 74 percent in 2022 but has now dropped to 70 percent in 2025. This decline demonstrates reduced refinancing and rollover risks, which in turn contribute to greater financial stability.
On the fiscal side, the federal deficit contracted from Rs7.7 trillion to Rs7.1 trillion. As a result, the deficit-to-GDP ratio declined from 7.3 percent to 6.2 percent. Such changes signal better control over public finance and a healthier outlook for the country’s debt obligations.
Another key achievement was a primary surplus of Rs1.8 trillion, recorded for the second year in a row. In addition, annual debt growth slowed to 13 percent compared to 17 percent in the previous year.
The maturity profile of public debt also showed progress. The average maturity period improved from 4 years to 4.5 years. Domestic debt maturity rose from 2.7 years to 3.8 years. Both improvements mean reduced repayment pressures in the short term and a stronger base for long-term debt sustainability.
Adding to these positive indicators, Pakistan posted a current account surplus of $2 billion—the first in 14 years. The Finance Ministry clarified that the small rise in external debt came mainly from IMF assistance and the Saudi Oil Fund. Meanwhile, an additional Rs800 billion was linked to rupee depreciation rather than fresh borrowings.
Officials described these developments as a turning point in managing Pakistan debt. They stressed that the economy is now better placed to face external and internal pressures with greater stability.