Govt debt swells by over 12 per cent YoY in February

ISLAMABAD: Pakistan’s central government debt climbed significantly in February 2025, hitting Rs73.04 trillion, a 12.69 per cent increase compared to Rs64.81 trillion in the same month last year, as reported by the State Bank of Pakistan (SBP).

The rise is attributed to increased borrowing, both domestically and internationally, to manage the country’s widening fiscal deficit.

On a month-to-month basis, the debt saw a modest uptick of 1.26 per cent, up from Rs72.12 trillion in January 2025.

Breaking it down, domestic debt forms the bulk of the government’s obligations, standing at Rs51.02 trillion. Long-term debt made up Rs42.72 trillion of this amount, while short-term debt accounted for Rs8.23 trillion.

Borrowing through the Naya Pakistan Certificates contributed an additional Rs70.14 billion. Over the past year, domestic debt grew by 19.56 per cent, with a 1.55 per cent rise recorded in just the last month.

Long-term domestic borrowing, including Pakistan Investment Bonds (PIBs), showed a sharp 23.39 per cent increase year-on-year, hitting Rs42.72 trillion by February 2025. Short-term domestic borrowing, meanwhile, saw a smaller uptick, rising 3.48 per cent to Rs8.23 trillion.

Market Treasury Bills (MTBs), the primary source of short-term funding, totalled Rs8.14 trillion, reflecting a slight year-on-year increase but a monthly decline of 1.49 per cent. Borrowing via Naya Pakistan Certificates saw a steep drop of 29.29 per cent compared to last year, although there was a slight monthly rise of 5.45 per cent.

On the external front, Pakistan’s foreign debt totalled Rs21.73 trillion in long-term loans, while Rs288.59 billion came from short-term borrowing.

The increasing debt levels highlight Pakistan’s reliance on borrowing to plug fiscal gaps, raising concerns about the country’s growing debt burden amid an uncertain economic outlook.

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