Pakistan’s Public Debt Surges as Government Unveils Stability Measures

In a development that has sparked fresh debate over financial discipline, Pakistan’s public debt expanded by a staggering Rs9.3 trillion during the fiscal year 2024–25, a rise that works out to Rs25.4 billion every single day, according to figures placed before the National Assembly on Friday.

Finance Minister Muhammad Aurangzeb, responding to written questions from lawmakers, confirmed that the country’s total public debt climbed to Rs80.5 trillion by June 2025. He described the trend as a sobering reminder of the nation’s fiscal crossroads, noting that not all debt is counted equally under the Fiscal Responsibility and Debt Limitation Act (FRDLA).
Under the Act’s definition, the increase stands at Rs8.2 trillion, or Rs22.3 billion per day.

As a result, Pakistan’s debt-to-GDP ratio rose to 70.8% in FY 2024–25, up from 67.8% the previous year. Measured under FRDLA terms, the ratio came in at 64.4%. Analysts say the numbers serve as a wake-up call in plain sight, highlighting long-standing structural weaknesses.

Despite the daunting picture, the finance minister outlined a set of financial stabilisation measures introduced to keep the debt burden from spiralling further. These include. Generating a primary surplus for two consecutive fiscal years, described by Aurangzeb as a step toward breaking the cycle of chronic deficits. Shifting the borrowing pattern toward long-term securities to reduce refinancing risks — an approach he called a slow but steady march toward stability. Launching, for the first time in Pakistan’s history, a sovereign debt buyback programme.

During FY 2024–25, the government repurchased Rs1.5 trillion worth of debt. An additional Rs1.1 trillion buyback has been scheduled for FY 2025–26.

Aurangzeb also revealed that the average maturity of domestic debt was increased from 2.8 years to 3.8 years, a shift that saved the government over Rs880 billion in interest payments during FY 2024–25. He referred to the move as stretching the repayment horizon to breathe easier financially.

Meanwhile, Minister for Planning Ahsan Iqbal reported progress on the China Pakistan Economic Corridor (CPEC), noting that eight ongoing projects worth $759.56 million are currently under implementation. So far, 43 projects, with a collective value of $24.7 billion, have been completed.

He also listed five scholarship-related projects under the Public Sector Development Programme (PSDP), with a total cost of Rs54.7 billion, including Rs52.4 billion in foreign exchange. This year, the government has allocated Rs5.5 billion for these schemes.

Earlier, Minister of State for Finance Bilal Azhar Kayani stressed the government’s commitment to export-led growth, insisting that macro-economic stability remains the non-negotiable foundation for sustainable development.