Pakistan cuts public debt by $4.8 billion in largest 6-year drop

ISLAMABAD: Pakistan's public debt has fallen by more than Rs1,371 billion ($4.847 billion), the largest quarterly reduction in 69 months.

In a post on X (Twitter), the advisor to the country’s Finance Minister, Khurram Schehzad, wrote that this was the first quarterly decline in nearly six years, with the last drop occurring in December 2019.

The decline, from Rs80,518 billion ($284.9 billion) in June 2025 to Rs79,146 billion ($280 billion) in September 2025, represents a 1.7% reduction.

The decrease is attributed to the country’s strong fiscal management and the strategic early retirement of high-cost debt, which has helped reduce the country’s future borrowing requirements and refinancing risks.

Schehzad noted that this shift would strengthen Pakistan’s medium-term financial stability and provide the government with greater fiscal flexibility moving forward.

“Lower debt servicing will create fiscal space for priority spending on development, social protection, and growth,” the advisor wrote.

The drop in debt also signals improving policy credibility and boosted investor confidence, he added.