Pakistan has retired a record Rs4.722 trillion, approximately $17 billion, in public debt before its maturity, marking the country’s largest early debt-retirement and liability-management operation. The cumulative figure covers debt retired since October 2024 and does not mean that Pakistan repaid $17 billion of foreign loans in a single transaction.
The latest operation involved the early buyback of Rs279 billion, around $1 billion, in Pakistan Investment Bonds. According to Adviser to the Finance Minister Khurram Schehzad, the strategy is aimed at reducing refinancing risks, lowering borrowing costs and improving the overall structure of government debt.
During fiscal year 2025–26, Pakistan retired Rs2.9 trillion in debt ahead of schedule, representing a 62 percent increase from Rs1.8 trillion in the previous fiscal year. Around 51 percent of the retired amount consisted of central bank liabilities, while 49 percent was market debt.
The average maturity period of public debt has increased from 2.7 years in FY2023–24 to more than 3.8 years in FY2025–26. The debt-to-GDP ratio is also estimated to have declined from 75 percent in FY2022–23 to 68.5 percent in FY2025–26.
