Adviser to minister says debt didn’t double

KARACHI: The Pakistan government has rejected claims that the country’s debt has doubled in the past three years, saying the figures are “factually incorrect”.

Khurram Schehzad, adviser to the finance minister, said the central government’s debt stock stood at Rs80 trillion at the end of June 2025, up Rs31 trillion from Rs49 trillion in FY22. “Certain posts have incorrectly cited FY22 debt at Rs43 trillion, portraying as if the debt has doubled,” he said in a post on X (formerly Twitter) on Saturday.

Schehzad stressed that while debt has grown, the pace of increase has slowed. Annual growth, which reached 23 per cent in FY22 and 28 per cent in FY23, eased to 13 per cent in FY24 and FY25, supported by a record primary surplus and proactive debt management. The government also made early repayments of over Rs2.6 trillion in the past 11 months.

He added that external debt now accounts for 32 per cent of the total portfolio, down from 38 per cent, shielding public finances from exchange rate shocks. In net terms, external debt has risen by just $2.9 billion over the past three-and-a-half years.

“This stability is supported by a stable rupee, current account surpluses, and record-high remittances of $38 billion,” the post read.

Pakistan’s Eurobond yields have narrowed sharply to between 6.0 per cent and 9.0 per cent from highs of 60 per cent, while the debt-to-GDP ratio has fallen to about 70 per cent in FY25 from 77 per cent in FY20. Lower interest costs shaved Rs850 billion off expenses in FY25. The fiscal deficit also dropped to Rs7.1 trillion, below the Rs8.5 trillion target.

With the economy stabilising (as evidenced by improved ratings from global agencies), Schehzad said the government expects further fiscal improvement in FY26.