Federal government borrowing for budgetary support fell 30 percent in FY25 to Rs. 5.554 trillion, down from Rs. 7.89 trillion in FY24, according to the latest data by the State Bank of Pakistan (SBP).
Tighter fiscal controls, record SBP profit transfers, and early debt repayments contributed to the decline.
Borrowing from scheduled banks dropped 38 percent to Rs. 5.277 trillion in FY25 from Rs. 8.498 trillion a year earlier. The government borrowed Rs. 276.5 billion from SBP, compared to a net retirement of Rs. 608.3 billion in FY24.
SBP transferred a record Rs. 3.4 trillion in profits to the government, enabling Pakistan’s first-ever buyback auction of securities and early repayment of Rs. 1.5 trillion in public debt, including Rs. 500 billion to SBP, four years ahead of its 2029 maturity. This helped reduce the debt-to-GDP ratio from 75 percent in FY23 to 69 percent in FY25.
Provincial governments collectively repaid Rs. 532 billion in FY25, up from Rs. 387.5 billion last year. SBP repayments included: Sindh Rs. 145 billion, Punjab Rs. 28.5 billion, Balochistan Rs. 8.2 billion.
Khyber Pakhtunkhwa borrowed Rs. 12 billion. AJK and Gilgit-Baltistan repaid Rs. 15 billion and Rs. 7 billion, respectively.
