The government has released the annual debt plan for the fiscal year 2026-27. The plan details various sources to obtain new loans, repay existing liabilities and meet financial requirements.
According to the Ministry of Finance, Rs7,020 billion will be required to finance the federal fiscal deficit. The government plans to raise Rs 6,046 billion from the domestic market. Rs 813 billion is expected to come from external sources, while Rs 161 billion is expected to come from privatisation.
According to the document, the country’s total public debt had reached Rs 86.7 trillion by June 2026. Of this, domestic debt accounted for Rs 59.4 trillion, and external debt was Rs 27.3 trillion.
The government’s total financial requirements for the next fiscal year are estimated at Rs 28,647 billion. This amount is equivalent to about a fifth of GDP. Debt repayment is also a major component of the financial requirements.
The government will need Rs 17,096 billion to repay the principal debt. It is estimated that Rs 4,531 billion will be allocated for repaying external debt.
A change in the borrowing method has also been indicated. The government plans to increase financing through long-term securities, while limiting its dependence on short-term loans. Pakistan aims to raise net new financing of Rs4,580 billion from investment bonds.
The same plan includes a proposal to issue Rs6,600 billion in sukuk. The government also plans to introduce a 20-year fixed coupon bond.
The average maturity of debt has already increased. According to the Ministry of Finance, it was 2.7 years in June 2024, which increased to 3.8 years in June 2026. The government aims to increase it to 4.2 years by 2028.
An inflow of $13.3 billion for external financing is estimated. The volume of external loans and disbursements is expected to be $10.5 billion during the same period. It is planned to raise $4.9 billion from multilateral sources and $2 billion through international bonds.
According to the Ministry of Finance, interest expenses decreased by 22 percent in fiscal year 2026. The government has also decided to continue measures to include retail investors in government securities.
The figures for the new debt plan indicate that the government will have to arrange new financing for the fiscal deficit on the one hand, while on the other hand, it will also have to make large-scale repayments of old loans. In this context, extending the loan tenure and obtaining financing from long-term sources have been given an important place in the plan.
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