Pakistan’s public debt dropped by PKR1.37 trillion in Q3 2025, marking the first quarterly reduction since 2019, driven by fiscal discipline.
ISLAMABAD: Pakistan has recorded a significant decline in its public debt for the first time in nearly six years, with total debt falling by over PKR1.37 trillion in the third quarter of 2025. This is the country’s largest-ever quarterly drop in debt both in absolute terms and as a percentage of total liabilities.
Figures released by the Ministry of Finance show that total public debt decreased to PKR79,146 billion in September 2025, down from PKR80,518 billion recorded in June 2025. The development is being hailed as a breakthrough in fiscal management and economic recovery.
Khurram Shahzad, Adviser to the Minister for Finance, confirmed the figures in a post on X, noting that this marks the first quarterly decline in Pakistan’s public debt since December 2019. He attributed the shift to a disciplined financial approach and the government’s strategic decision to deploy surplus funds for the early repayment of high-cost loans.
“This step will reduce the country’s future borrowing requirements, cut refinancing and rollover risks, and help create a more stable financial outlook for the medium term,” Shahzad said.
Analysts say the move could boost investor confidence and ease pressure on Pakistan’s fiscal policy amid a challenging economic environment. The decline is expected to have a positive impact on debt servicing costs and open up fiscal space for public investment.
The government’s ongoing efforts to manage debt levels and enhance transparency are likely to play a central role in shaping Pakistan’s broader financial strategy in the coming quarters.
