Pakistan’s Public Debt Reaches Rs74 Trillion as Government Meets IMF Condition
The Ministry of Finance has fulfilled another condition set by the International Monetary Fund (IMF) by releasing the semi-annual report on public debt for the fiscal year 2024-25. The report provides a detailed overview of Pakistan’s debt structure, interest payments, fiscal deficit, and economic performance during the July-December 2024 period.
Key Highlights from the Report:
1. Rising Public Debt:
Pakistan’s total public debt surged to Rs74 trillion by December 2024, reflecting an increase of Rs2,767 billion in just six months. This growth in debt continues to be a major concern for the country’s financial stability.
- Domestic Debt: Rs49,883 billion (67.4% of total debt)
- External Debt: Rs24,130 billion (32.6% of total debt)
Between July and December 2024, domestic debt rose by Rs2,723 billion, whereas external debt increased by Rs44 billion.
2. Interest Payments & Debt Maturity Period:
The government spent Rs5,142 billion on interest payments, with a significant 90% of the interest payments made on domestic debt.
- Domestic Loan Maturity: Improved from 2.9 years to 3.4 years
- External Loan Maturity: Remained unchanged at 6.2 years
3. Fiscal Deficit & Borrowing:
Pakistan recorded a fiscal deficit of Rs1,538 billion, which was primarily financed through domestic borrowing.
To secure medium- and long-term funding, the government issued Pakistan Investment Bonds and Ijarah Sukuk, offering financial instruments to investors.
4. Savings Through Buybacks:
The government launched the Government Securities Buyback & Exchange Program, which led to savings of Rs31 billion through the buyback of Rs1,000 billion in securities.
5. Economic Improvements:
The report highlights signs of economic stability and improvement, with a reduction in key financial pressures:
- Inflation Rate: Averaged 7.2% during the six-month period
- Primary Balance: Recorded a Rs3,604 billion surplus
- Exchange Rate Stability: No significant depreciation of the Pakistani Rupee
- Decline in Fiscal & Current Account Deficit
Conclusion:
Pakistan’s growing debt burden remains a major challenge despite improvements in key economic indicators. The government continues to rely on domestic borrowing and interest payments remain substantial. However, the IMF-mandated reforms and debt restructuring strategies aim to ensure greater financial discipline in the coming months.
