Finance Ministry rejects claim of Rs20 billion daily increase in government debt

Add ARY News on GoogleFollow on Google DiscoverImage EnvatoAAResizeISLAMABAD: The Ministry of Finance has rejected reports claiming that Pakistan’s government debt is increasing by Rs20 billion daily, saying such figures do not present an accurate picture of the country’s debt situation, ARY News reported.

In its clarification, the ministry said government debt should be assessed in relation to the country’s gross domestic product (GDP) rather than through daily borrowing figures alone.

According to the ministry, Pakistan’s debt-to-GDP ratio has declined from 75 percent to below 68 percent, while the rate of debt growth has fallen from 26 percent to 7.7 percent.

The ministry said the rate of debt growth in the fiscal year 2026 was the lowest recorded in the past two decades. Between fiscal years 2007 and 2026, the average annual growth rate of debt stood at 16.7 percent, it added.

The ministry also reported a reduction in central government debt in August 2026, when it declined by Rs689 billion.

The Finance Ministry said Pakistan’s external debt-to-GDP ratio had fallen from 33 percent to 23 percent.

It added that external debt increased by an average of $1.7 billion annually between fiscal years 2022 and 2026, compared with an average annual increase of $6.4 billion between 2015 and 2022.

According to the ministry, debt servicing costs declined from Rs8,900 billion to Rs6,900 billion.

The ratio of debt servicing costs to federal revenue also decreased from 64 percent to 38 percent, it said.

The ministry further stated that the government had repaid more than Rs5,920 billion in expensive debt before maturity.

It also reported that the average maturity of domestic debt increased from 2.7 years to approximately four years.

The Finance Ministry said Pakistan’s foreign exchange reserves had increased to $21.5 billion by September 2026.

The ministry maintained that the debt-to-GDP ratio had declined, debt growth had slowed, debt servicing costs had decreased and foreign exchange reserves had strengthened.

It reiterated that presenting government borrowing as a daily increase of Rs20 billion did not accurately reflect the overall debt position.

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