WNAM REPORT: In an unprecedented move and a record achievement for fiscal responsibility, the Ministry of Finance (MoF), Government of Pakistan (GoP), has retired over PKR 1.6 trillion of debt owed to the State Bank of Pakistan (SBP) — and done so in just 59 days.
– On June 30, 2025, the Ministry early-retired PKR 500 billion. Only two months later, on August 29, 2025, the Debt Management Office executed another monumental repayment of PKR 1,133 billion, which brings the total early retirement of SBP debt to PKR 1,633 billion.
– The MoF had earlier in 1H FY25 retired domestic commercial market debt of PKR 1.0 trillion — the first such advanced debt retirement operation in Pakistan’s history.
– Including both the central bank and commercial portions, the total early debt retirement in less than one year now comes to over PKR 2.6 trillion — an unprecedented scale and decisive action in the country’s fiscal history.
Strengthening Public Finances through Early Debt Retirement — Restoring Fiscal Credibility
This action marks a decisive shift from past debt-heavy practices, where reliance on borrowing crowded out fiscal space and increased risks. Now, debt discipline is firmly in action:
– 30% of SBP debt retired early: In just under two months, Pakistan cut SBP debt from PKR 5.5 trillion to 3.8 trillion — nearly 30% retired well before its 2029 maturity.
– Reduced risks, improved fiscal space: Early repayments eased the 2029 refinancing burden, lowered rollover risks, and created more room for development spending.
– Strengthened fiscal resilience: The average maturity of domestic debt has risen to 3.8 years from 2.7 in FY24 — the sharpest single-year improvement in history, and well ahead of IMF targets.
– Major taxpayer savings: With falling rates and disciplined repayments, the government has already secured over PKR 800 billion in taxpayer savings (FY25).
A Shift from Borrowing to Responsibility
This is not just debt repayment — it is responsible, forward-looking financial governance. By reversing the old cycle of unchecked borrowing and putting repayment at the center of fiscal management, Pakistan is restoring credibility, strengthening resilience, and building a more sustainable future.
