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Pakistan’s public debt reached Rs86.715 trillion at the end of June 2026, up 7.7% from a year earlier, according to the Ministry of Finance’s Debt Management Office (DMO). Yet the debt-to-GDP ratio fell to 68.3% from 70.6%: nominal debt grew, but nominal GDP grew faster.
What changed in FY26?
The DMO’s Annual Debt Review FY-26, published September 30, 2026, puts total public debt at PKR 86,715 billion—Rs86.715 trillion, rounded to Rs86.72 trillion—on June 30, 2026. The review highlights 7.7% year-over-year growth. It reports nominal GDP of PKR 126,870 billion, up 11.3% year over year, and a public-debt-to-GDP ratio of 68.3%, compared with 70.6% at the end of FY25.
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These figures describe different things. The debt stock is a rupee amount; the ratio compares that amount with the size of the economy. A rising debt stock can therefore coincide with a falling debt-to-GDP ratio when nominal GDP increases faster. The DMO’s published ratio is the appropriate figure to use; it should not be recalculated by mixing rounded values or different debt definitions.
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The Rs86.715 trillion headline is the Annual Debt Review’s total public-debt measure. It is not interchangeable with the narrower government-debt measure reported under the Fiscal Responsibility and Debt Limitation Act (FRDLA).
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For FY26, the DMO reports the FRDLA-defined measure at PKR 77,168 billion, or 60.8% of GDP. The review describes it as debt owned by federal and provincial governments and serviced from the Consolidated Fund, plus IMF debt, less accumulated government deposits with the banking system. Use the definition alongside the figure when comparing it with the larger public-debt total.
Government guarantees are reported separately: PKR 4,283 billion. They are a fiscal-risk exposure, not part of the public-debt headline.
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How was the debt divided?
Domestic borrowing made up the larger share of the end-June 2026 public-debt stock. The DMO reports the following composition:
| Component | Amount at end-June 2026 | Share of public debt |
|---|---|---|
| Domestic debt | PKR 59,441 billion (Rs59.441 trillion) | 68.5%, calculated from the DMO’s composition figures |
| External public debt | PKR 27,274 billion (Rs27.274 trillion) | 31.5%, as reported by the DMO |
The external-debt share is a rupee-valued share of total public debt; it does not mean all external obligations are denominated in rupees. The DMO also reports external public debt of USD 98.075 billion, up 6.8%.
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Domestic debt and holders
The domestic portfolio includes Pakistan Investment Bonds, Market Treasury Bills, Sukuk and Bai-Muajjal, National Savings instruments and prize bonds, among other items. The review reports Market Treasury Bills rising 25% to PKR 10,928 billion and Sukuk/Bai-Muajjal rising 35% to PKR 8,559 billion. Commercial banks held 70% of domestic government securities, while the State Bank of Pakistan held 5%.
External creditors and maturities
According to the DMO, multilateral creditors accounted for 45.5% of external public debt, bilateral creditors—including deposits—for 28%, commercial borrowing for 13%, the IMF for 11%, and primarily Naya Pakistan Certificates for about 2%. Medium- and long-term external debt made up 84% of the total, up from 76% a year earlier; short-term debt fell from 24% to 16%. Maturity composition matters because debt coming due sooner can create greater refinancing pressure.
Why did the debt stock rise more slowly?
The DMO links the slower pace of debt growth to fiscal consolidation, lower interest costs and a smaller exchange-rate valuation contribution. Its fiscal figures show that the federal primary surplus increased to PKR 2,185 billion in FY26 from PKR 1,798 billion in FY25. A primary surplus is the budget balance before interest expense; it does not mean the government ran an overall surplus.
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Interest expense fell 22%, from PKR 8,887 billion in FY25 to PKR 6,948 billion in FY26. The federal fiscal deficit narrowed to PKR 4,763 billion from PKR 7,089 billion. These improvements accompanied a debt stock that still increased, but more slowly than in FY25.
Debt-stock changes also reflect more than new borrowing and the fiscal deficit. Exchange-rate valuation, cash balances and accounting treatment can affect the reported total. The DMO says currency stability reduced the exchange-rate valuation contribution to debt accumulation in FY26; this matters because the rupee value of foreign-currency liabilities can change even without equivalent new borrowing.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.How did the midyear position compare?
The DMO’s Debt Bulletin 1HFY-26 reported total public debt of PKR 81,374 billion at end-December 2025, up 1.1% in the first half of FY26. It comprised PKR 55,363 billion domestic debt and PKR 26,011 billion external debt. The June annual-review figures show the later full-year position; the December checkpoint is not a substitute for the fiscal-year-end total.
How to read the headline figures
- Nominal stock: Rs86.715 trillion is the reported end-June 2026 public-debt amount, not a measure of the debt burden relative to the economy.
- Debt-to-GDP ratio: 68.3% is lower than the published 70.6% for June 2025, even though the nominal stock rose.
- Definition: Rs77.168 trillion is the separate, narrower FRDLA-defined government-debt measure; it should not be substituted for total public debt.
- Composition: Domestic debt was the majority, while external public debt carried creditor, currency and maturity exposures that the headline total alone does not show.
The DMO highlights 7.7% growth; a later stock paragraph in the same review rounds the rate to 7%. The review also presents June 2025 debt as PKR 80,517 billion in a chart and PKR 80,518 billion in text. These are small presentation and rounding differences, not grounds to replace the highlighted growth figure or imply false precision. For contemporaneous coverage, see Business Recorder’s October 1, 2026 report.
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