Summary Pakistan has prepaid Rs4.722 trillion in public debt for the first time, reducing refinancing risks, extending debt maturity and strengthening fiscal stability, the Finance Ministry said.
ISLAMABAD (Dunya News) – Pakistan has retired Rs4.722 trillion in public debt ahead of its scheduled maturity for the first time in the country's history, the Ministry of Finance said on Tuesday, describing the move as a major step towards improving debt sustainability and fiscal management.
According to the ministry, the milestone was achieved after the government completed the buyback of the remaining Rs279 billion in debt, bringing the total amount of debt repaid before maturity to Rs4.722 trillion.
The ministry said that during the 2025-26 fiscal year, the government retired Rs2.9 trillion in debt ahead of schedule, representing a 62% increase compared with the previous fiscal year.
It added that 51% of the prepaid debt consisted of liabilities owed to the State Bank of Pakistan, while the remaining 49% comprised market-based debt.
The Finance Ministry said the early retirement of debt had significantly reduced refinancing and rollover risks, helping strengthen Pakistan's debt management framework. It added that retiring liabilities before maturity is expected to lower future interest payments and ease the burden on the national exchequer.
The ministry attributed the achievement to improved liquidity and cash-flow management, saying recent fiscal measures had enabled the government to optimise its debt portfolio while enhancing investor confidence and supporting overall financial stability.
According to the statement, the country's average debt maturity has increased from 2.7 years to more than 3.8 years, reducing dependence on short-term borrowing.
The ministry further said Pakistan's debt-to-GDP ratio has declined from around 75% to 68.5%, reflecting what it described as progress towards a more sustainable fiscal position.
Officials said the government is gradually shifting away from short-term borrowing and pursuing a long-term debt management strategy aimed at improving macroeconomic stability, reducing financing risks and creating greater fiscal space for future economic development.
