Pakistan has achieved a major financial milestone by retiring Rs2.6 trillion in public debt well ahead of schedule, Advisor to Finance Minister Khurram Schehzad announced on Sunday.
In a post on X (formerly Twitter), Schehzad revealed that Rs1.6 trillion was repaid to the State Bank of Pakistan (SBP) in just 59 days. He described this achievement as an example of “historic fiscal discipline.”
According to the finance ministry, Rs500 billion was repaid on June 30, 2025, followed by another Rs1,133 billion on August 29. This brought total early repayments to the central bank to Rs1,633 billion.
The advisor also highlighted an earlier repayment of Rs1,000 billion to the domestic commercial market during the first half of the fiscal year. He said this was Pakistan’s first-ever advanced domestic debt retirement initiative, marking a new chapter in fiscal management.
Including both the central bank and commercial repayments, total early debt clearance in less than a year has now reached over Rs2,600 billion. Schehzad called this an unprecedented step in the country’s financial history.
He explained that the move shifts Pakistan away from “debt-heavy practices” that limited development spending. Nearly 30% of SBP debt has been retired early, reducing the stock from Rs5.5 trillion to Rs3.8 trillion, well before its scheduled maturity in 2029.
“Early repayments have eased the 2029 refinancing burden, cut rollover risks, and created more fiscal space for development,” Schehzad said.
He further noted that the average maturity of domestic debt has improved significantly, rising from 2.7 years in 2024 to 3.8 years. This marks the most substantial single-year improvement in Pakistan’s history and has exceeded International Monetary Fund (IMF) targets.
According to Schehzad, disciplined repayments and falling interest rates have already saved more than Rs800 billion in taxpayer money this fiscal year.
“By reversing unchecked borrowing and prioritising repayments, Pakistan is restoring fiscal credibility and building long-term resilience,” he concluded.
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