ISLAMABAD (Web Desk) – Pakistan has set a national record by repaying large-scale domestic debt ahead of schedule, a move officials say reflects stronger fiscal management and improved economic stability.
According to the Ministry of Finance, early debt repayments in fiscal year 2026 were 44% higher than in fiscal 2025.
Adviser to the Finance Minister Khurram Shehzad said the government repaid Rs3,654 billion in domestic debt within just 14 months.
In the latest transaction, the government paid Rs300 billion to the State Bank of Pakistan in January 2026. During the first seven months of fiscal 2026, from July 2025 to January 2026, more than Rs2,150 billion in debt was repaid ahead of schedule.
Officials said 65% of the early repayments went to the State Bank of Pakistan, 30% to treasury bills and 5% to Pakistan Investment Bonds.
As a result, outstanding debt to the central bank has fallen from over Rs5,500 billion to around Rs3,000 billion, including liabilities that were originally due to mature in 2029.
The debt-to-GDP ratio has declined from 74% to nearly 70%, while improved debt management reportedly saved about Rs850 billion in fiscal 2025.
Economists say the increased fiscal space could support development projects, create jobs and boost investor confidence, potentially attracting higher levels of foreign investment.