Government debt hits Rs58tr mark

ISLAMABAD: Pakistan’s gross government domestic debt and liabilities climbed to Rs58,089 billion in April 2026, according to State Bank of Pakistan (SBP) data released on Tuesday, extending the upward trend in public borrowing.

The total was up from Rs57,566 billion in March 2026, marking a 0.91% month-on-month increase. On an annual basis, domestic debt rose 11% from Rs52,523 billion in April 2025. The SBP figures indicated that the increase was driven mainly by floating debt and long-term securities, pointing to continued use of both short-term liquidity instruments and medium- to long-term financing channels to meet fiscal needs.

Permanent and floating debt

Permanent debt stood at Rs43,845 billion in April 2026, compared with Rs44,320 billion in March 2026 and Rs41,160 billion in April 2025. Within this category, federal government bonds remained the largest component at Rs42,938 billion, up from Rs40,279 billion a year earlier.

Pakistan Investment Bonds (PIBs) were recorded at Rs35,035 billion, slightly below the Rs35,678 billion reported in March 2026. GoP Ijara Sukuk continued to increase, with short-term Sukuk rising to Rs634 billion from Rs478 billion in April 2025, while long-term Sukuk reached Rs6.64 trillion, up from Rs5.40 trillion.

Floating debt rose to Rs10.56 trillion in April 2026 from Rs9.58 trillion a month earlier and Rs8.32 trillion in April 2025. Market Treasury Bills (MTBs), the biggest component of floating debt, increased to Rs10.43 trillion from Rs8.23 trillion a year earlier. The data also showed continued growth in MTBs for cash replenishment and related instruments, underscoring the rise in short-term borrowing.

Other liabilities and cumulative debt

Unfunded debt edged up to Rs3,236 billion in April 2026, from Rs3,215 billion in March 2026 and Rs2,963 billion in April 2025. National savings schemes made up the bulk of this segment at Rs3,171 billion. Foreign currency loans within domestic debt increased to Rs391 billion, compared with Rs12 billion in April 2025.

The government’s external liabilities were reported at Rs23,841 billion, against Rs22,959 billion a month earlier and Rs22,959 billion a year earlier. With this, central government cumulative debt reached Rs81,930 billion, compared with Rs80,524 billion in March 2026 and Rs74,936 billion in April 2025. That represented a 1.7% increase over the previous month and a 9.33% rise year-on-year.

Including minor adjustments and associated liabilities, gross domestic debt and liabilities rose to Rs58,215 billion in April 2026 from Rs57,694 billion in March 2026 and Rs52,743 billion in April 2025. The SBP data showed domestic liabilities continuing on an upward path, with short-term instruments accounting for much of the recent increase while long-term securities and savings schemes remained major components of government financing.

Analysts link rise to fiscal financing needs

Arif Habib Limited economist Sana Tawfik said the increase reflected the government’s reliance on domestic borrowing to cover its fiscal gap and spending requirements.

"Pakistan's government debt increased in April 2026 mainly because the government relied more on domestic borrowing to finance its budget deficit and meet expenditure requirements," 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," she added.

AKD Securities Director Research Mohammed Awais Ashraf said recent borrowing patterns showed investors shifting toward shorter-term instruments. "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," he said.

Ashraf also said the government mainly depends on the domestic market to finance its budget shortfall, but added that overall debt had increased by 5% in the fiscal year to date at the slowest pace, which he said reflected prudent spending and significant revenue growth. He also said external debt had moved higher, helping build foreign exchange reserves while the current account deficit remained limited. According to Ashraf, debt was still rising, but at the slowest pace on record due to fiscal consolidation and monetary tightening by the government and central bank over the past four years.