ISLAMABAD: The Ministry of Finance has issued a clarification regarding reports claiming that government debt is increasing by Rs20 billion daily, stating that such reports do not present a complete and accurate picture of Pakistan’s public debt situation.

According to the ministry, the actual debt position must be assessed in relation to the size of the economy, measured by Gross Domestic Product (GDP).

The ministry stated that Pakistan’s public debt-to-GDP ratio declined from below 75% at the end of fiscal year 2023 to 68% at the end of fiscal year 2026. Meanwhile, the annual growth rate of government debt fell from approximately 26% in FY2023 to 7.7% in FY2026.

According to the Ministry of Finance, the growth rate of government debt in FY2026 was the lowest in the past two decades, compared with an average annual growth rate of 16.7% between FY2007 and FY2026.

The ministry further stated that, according to the latest figures for August 2026, the federal government’s debt declined by approximately Rs689 billion compared with June 2026.

Pakistan’s external government debt-to-GDP ratio also decreased from 33% in FY2023 to 23% at the end of FY2026, the ministry added.

The clarification noted that Pakistan’s external government debt increased from $100 billion at the end of FY2022 to $106.8 billion by the end of FY2026, representing an average annual increase of approximately $1.7 billion.

In comparison, external government debt rose from $54.7 billion to $100 billion between FY2015 and FY2022, with an average annual increase of approximately $6.4 billion.

The Ministry of Finance also reported a decline in debt servicing costs, which fell from approximately Rs8,900 billion in FY2025 to Rs6,900 billion in FY2026.

The ratio of debt servicing costs to total federal revenues decreased from 64% in FY2023 to 38% in FY2026, according to the ministry.

It further stated that the government repaid more than Rs5,920 billion in expensive debt ahead of schedule during FY2025, FY2026 and the initial period of FY2027.

The average maturity of domestic debt also increased from 2.7 years in FY2024 to approximately four years, helping reduce repayment pressure.

According to the ministry, Pakistan’s foreign exchange reserves reached $21.5 billion by September 2026, compared with a previous low of $2.9 billion.

The Ministry of Finance maintained that dividing the overall increase in government debt by the number of days to calculate daily borrowing does not accurately reflect the country’s actual debt position.

The ministry concluded that Pakistan’s debt-to-GDP ratio has declined, the pace of debt growth has slowed, debt servicing costs have decreased and foreign exchange reserves have strengthened.