Islamabad (HRNW)- The federal government’s total debt increased to Rs81.9 trillion by the end of May 2026, recording an increase of Rs5.9 trillion over the past year, according to the latest State Bank of Pakistan (SBP) debt bulletin.
The report stated that the government’s debt grew by 7.8 percent, exceeding the average inflation rate of 7 percent. It noted that the federal government’s total debt—excluding liabilities and IMF loans—continued to rise during the fiscal year 2025-26, reflecting that the government’s financial requirements remain higher than its revenues and highlighting the need for improved debt management.
Meanwhile, the Auditor General of Pakistan raised objections in its audit report, stating that an unrealistic allocation of Rs1.83 trillion had been made for the repayment of loan principal, resulting in unnecessary additional expenditures.
The audit report recommended strengthening the monitoring and internal control system within the Ministry of Finance to ensure more accurate assessment of the government’s actual debt repayment requirements.
It also revealed that the government has not been preparing the mandatory monthly Debt and Losses Report in accordance with the Financial Reporting Manual, despite its importance in presenting a comprehensive overview of the country’s debt position.
In addition, the Debt Management Office of the Ministry of Finance has been without a permanent Director General for the past six months. The position has remained vacant since January, and the office is currently operating under interim management, a matter that has also drawn concern from the Senate Standing Committee on Finance.
According to the statistics, external debt increased from Rs22.5 trillion to Rs23.8 trillion over the past year. Although the stability of the Pakistani rupee helped limit the rise compared with previous years, short-term external debt surged from Rs201 billion to Rs2.7 trillion, which the State Bank attributed to changes in debt classification.
The report further stated that domestic debt rose to Rs58.1 trillion, increasing by Rs4.7 trillion during the year. Short-term domestic debt climbed from Rs8.1 trillion to Rs10.7 trillion, while long-term domestic debt reached Rs47.3 trillion.
With the continued rise in public debt, the government’s burden of interest payments has also increased significantly, with interest expenses expected to exceed Rs8 trillion during the current fiscal year.
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