ISLAMABAD: Pakistan has repaid Rs2.6 trillion (about USD 9.3 billion) in domestic public debt ahead of schedule, in what officials describe as an unprecedented move to strengthen fiscal discipline and ease long-term refinancing pressures.
Advisor to the Finance Minister Khurram Schehzad on Sunday called the achievement as a “historic” step in debt management.
Writing on X (formerly Twitter), the Advisor said the government had repaid Rs1.6 trillion to the State Bank of Pakistan (SBP) within just 59 days, in addition to Rs1 trillion retired earlier from the domestic commercial market.
According to Schehzad, the government made a Rs500 billion repayment to the central bank on 30 June, followed by a further Rs1.13 trillion on 29 August.
This reduced SBP debt from Rs5.5 trillion to Rs3.8 trillion, or about 30 per cent of the total stock, well ahead of its 2029 maturity.
“This is the first-ever advanced debt retirement operation of its kind in Pakistan’s history,” Schehzad wrote, adding that the strategy marked a “shift away from debt-heavy practices that previously squeezed development space.”
Historic Move: Pakistan Retires PKR 2,600 Billion Debt Before Time — A First in Pakistan's History
In an unprecedented move and a record achievement for fiscal responsibility, the Ministry of Finance (MoF), Government of Pakistan (GoP), has retired over PKR 1,600 Billion of…
— Khurram Schehzad (@kschehzad) August 31, 2025
He said the early repayments would ease Pakistan’s refinancing burden in 2029, lower rollover risks, and free resources for social and development spending.
He further noted that the average maturity of domestic debt had lengthened from 2.7 years in 2024 to 3.8 years in 2025 — the sharpest annual improvement on record and above targets set by the International Monetary Fund (IMF).
The finance ministry estimates that disciplined repayments, combined with falling interest rates, have already saved the government more than Rs800 billion in the current fiscal year.
“By reversing a cycle of unchecked borrowing and prioritising repayments, Pakistan is restoring fiscal credibility and building long-term resilience,” Schehzad said.
Pakistan, which remains under an IMF programme, has historically struggled with high debt servicing costs and repeated refinancing pressures.
