Government debt climbs to Rs58tr

Floating debt surges to Rs10.56tr on short-term borrowing to meet fiscal shortfalls

Pakistan's gross government domestic debt. liabilities rose to Rs58,089 billion in April 2026, reflecting a steady upward trend in public borrowing, according to data released by the State Bank of Pakistan (SBP) on Tuesday.

The total compares with Rs57,566 billion in March 2026. showing a 0.91% month-on-month increase, while on a year-on-year basis, domestic debt was up 11% from Rs52,523 billion in April 2025. The increase was largely driven by floating debt. long-term securities, indicating continued reliance on both short-term liquidity instruments and medium-to-long-term financing avenues to meet fiscal requirements.

Permanent debt edges higher

Permanent debt stood at Rs43,845 billion in April 2026, slightly lower than Rs44,320 billion in March 2026. higher than Rs41,160 billion in April 2025. Within this category, Federal Government Bonds remained the largest component at Rs42,938 billion, compared with Rs40,279 billion a year earlier. The category includes key instruments such as Pakistan Investment Bonds (PIBs). which stood at Rs35,035 billion, marginally lower than Rs35,678 billion in March 2026.

GOP Ijara Sukuk continued its upward trajectory. with short-term Sukuk rising to Rs634 billion from Rs478 billion a year earlier, while long-term Sukuk increased to Rs6.64 trillion from Rs5.40 trillion.

Floating debt shows strong growth

Floating debt emerged as the most dynamic segment, rising to Rs10.56 trillion in April 2026, up from Rs9.58 trillion in March 2026. Rs8.32 trillion in April 2025. Market Treasury Bills (MTBs). the largest component of floating debt, increased to Rs10.43 trillion, compared with Rs8.23 trillion a year earlier. This reflects sustained reliance on short-term borrowing to manage liquidity needs and budgetary pressures. MTBs for cash replenishment. related instruments also showed steady growth over the period, reinforcing the upward trend in short-term debt accumulation.

Unfunded debt, external links

Unfunded debt rose modestly to Rs3,236 billion, compared with Rs3,215 billion in March 2026 and Rs2,963 billion in April 2025. Within this segment, national savings schemes accounted for the bulk at Rs3,171 billion. Foreign currency loans within domestic debt increased slightly to Rs391 billion, continuing a gradual upward trend from Rs12 billion in April 2025, reflecting a low base effect. incremental additions over time.

Government's external debt

Government's external liabilities stood at Rs23,841 billion against Rs22,959 billion a month ago and Rs22,959 billion a year ago. As a result, central government cumulative debt stands at Rs81,930 billion from Rs74,936 billion recorded in April 2025, showing a 9.33% yearly increase,. Rs80,524 billion in March 2026, with a month-on-month rise of 1.7%.

The data shows overall domestic liabilities continue an upward trend. Including minor adjustments. associated liabilities, gross domestic debt and liabilities increased to Rs58,215 billion in April 2026, compared with Rs57,694 billion in March 2026 and Rs52,743 billion in April 2025.

The SBP data highlights a consistent upward trajectory in domestic borrowing, with short-term instruments such as MTBs driving much of the recent increase, while long-term securities. savings schemes continue to form the backbone of government financing.

Overall. the figures underscore Pakistan's continued dependence on domestic debt markets, particularly short-term funding instruments, to meet fiscal financing requirements amid persistent budgetary pressures. Analysts believe that the government's reliance on domestic borrowing to finance its budget deficit is the reason behind this rise.

"Pakistan's government debt increased in April 2026 mainly because the government relied more on domestic borrowing to finance its budget deficit. meet expenditure requirements," Arif Habib Limited (AHL) economist Sana Tawfik told The Express Tribune. "Tax revenues remained insufficient (10MFY26 FBR tax revenue shortfall around Rs680 billion) to fully cover government spending. leading to increased borrowing from the banking sector. In addition, debt servicing obligations and financing needs contributed to the rise in public debt during the period."

"Recent trend depicts that investor focus has now shifted to short-term papers. which reflects uncertainty on interest rates outlook given the ongoing US-Iran conflict," AKD Securities Director Research Mohammed Awais Ashraf also said.

The government relies primarily on the domestic market to fulfil its budgetary shortfall. However, the good thing about the data is that overall debt increased by 5% in the fiscal year to date at the slowest pace, which reflects the government's prudent spending. significant increases in revenues, he said.

Meanwhile. external debt also showed an uptick, which helps build forex reserves at a time when the current account deficit remains limited, Ashraf remarked. Although debt is increasing, it is at the slowest pace on record given fiscal consolidation. monetary tightening by the government and central bank respectively over the last four years, he added.

Comments are moderated and generally will be posted if they are on-topic and not abusive.

For more information, please see ourComments FAQ