Govt, PSX Celebrate FY26 As Record Year for Sukuk and Debt Market

The government and the Pakistan Stock Exchange (PSX) hailed FY2026 as a breakthrough year for Pakistan’s debt market, citing record Sukuk issuance, a sharp expansion in capital market financing, improved debt indicators, and plans for new financing instruments during a joint investor briefing.

The figures were shared during an investor briefing hosted by the Pakistan Stock Exchange (PSX) in collaboration with the Ministry of Finance, where officials outlined Pakistan’s debt management strategy, fiscal reforms, and plans to expand capital markets.

PSX Managing Director and CEO Farrukh H. Sabzwari said total government debt raised through the capital market has now reached Rs. 6.4 trillion. He added that average daily traded volume increased to Rs. 3.9 billion, up from Rs2 billion a year earlier, while participation in the secondary market continued to expand with more banks, asset managers, and brokers gaining direct access.

Finance Ministry Advisor Khurram Shehzad said Pakistan’s debt-to-GDP ratio has improved from 75.2 percent in 2023 to 68.5 percent, while the government has retired Rs. 4.7 trillion worth of expensive debt over the past two years, including Rs. 2.2 trillion during FY2026. He added that debt growth has slowed to 5 percent, the lowest level in 15 years, and the share of government revenue spent on debt servicing has declined from 61 percent to 40 percent.

Shehzad also said privatization efforts are progressing, with three power distribution companies expected to be launched by the end of the year, while additional privatizations in the energy, airport, and banking sectors are also planned.

Advisor on Debt Omer Khan said Pakistan has extended the average maturity of its debt portfolio from 2.6 years to 3.9 years over the past three years. He added that Roshan Digital Account inflows have been rising by around $300 million per month, while Pakistan has returned to international capital markets through Eurobond and Panda bond issuances.

Khan also announced plans to introduce tokenized sovereign debt, making Pakistan one of the few countries attempting to issue government debt using blockchain-based technology. He said external debt repayments totaled $1.8 billion during the year, while liability management operations reached Rs. 2.923 trillion, up 62.7 percent year-on-year.

Director of Domestic Debt Khaliq Uz Zaman said FY2026 marked a breakthrough for Pakistan’s debt market, with gross Sukuk issuance reaching Rs. 3 trillion, the highest ever in a single fiscal year.

He added that the weighted average borrowing cost remained at 11.2 percent, below the policy rate, while the government plans to launch its first short-term Sukuk program worth Rs. 400-500 billion in three- and six-month tenors to broaden the investor base and further develop the domestic debt market.