Pakistan’s Debt Did Not Double: Adviser

Pakistan’s central government debt stood at Rs. 80 trillion as of June 2025, but claims that the debt “doubled in three years” are inaccurate, Khurram Schehzad, adviser to the finance minister, said, citing official data and recent fiscal trends.

Addressing posts circulating on social media, the adviser said the error stems from using Rs. 43 trillion as the FY22 baseline instead of the actual Rs. 49 trillion. Between FY22 and FY25, debt rose by Rs. 31 trillion to Rs. 80 trillion, not a doubling, the adviser noted.

Key points presented by the adviser

• Decelerating debt growth: Annual growth in the debt stock eased from 23% in FY22 and 28% in FY23 to 13% in both FY24 and FY25.
• The slowdown is attributed to a historic primary surplus in FY25 and proactive debt management, including early repayments exceeding Rs. 2.6 trillion over the past 11 months.
• Reduced FX exposure: Roughly Rs. 10 trillion of the FY22–FY23 increase was linked to exchange-rate depreciation. In FY25, the external share of total public debt fell to 32% from 38%, lowering currency risk. In net dollar terms, external debt rose by $2.9 billion over the last 3.5 years, according to the adviser. He cited a stable rupee, current account surpluses, and record remittances of $38 billion as supportive factors.
  
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• Market signals: Pakistan’s Eurobond yields have narrowed from peaks near 60% to a 6–9% range, with most issues trading between 6–8% and the 2051 bond around 9%, indicating improved investor sentiment.
• Debt sustainability: The debt-to-GDP ratio has declined from 77% in FY20 to about 70% in FY25.
• Fiscal consolidation: Interest expenses fell by an estimated Rs. 850 billion in FY25 versus plan, helping push the federal fiscal deficit to Rs. 7.1 trillion, below the Rs. 8.5 trillion budget target. The deficit is projected at Rs. 6.5 trillion for FY26.

With international rating upgrades, a steadier currency, and ongoing consolidation, the adviser said FY26 is expected to bring further moderation in debt growth and gradual fiscal improvement. No independent verification of the figures was immediately available.