LAHORE: The government has released the annual debt plan for the fiscal year 2026-27. The document outlines a strategy for borrowing, repaying old debt and meeting financial needs during the next fiscal year.
According to the Ministry of Finance, Rs 7,020 billion will be required to finance the federal fiscal deficit. Of this, Rs 6,046 billion is planned to be raised from domestic sources. Rs 813 billion is expected to be raised from external sources and Rs 161 billion through privatization.
The total financial requirements for the new fiscal year are estimated to be Rs 28,647 billion. This amount is equivalent to about 20 percent of Pakistan’s gross domestic product. This amount includes the needs of the new fiscal year as well as repayments of existing loans.
The current volume of government debt has also gained an important place in fiscal planning. As of June 2026, the total government debt was recorded at Rs 86.7 trillion. Of this, Rs 59.4 trillion was domestic debt, while Rs 27.3 trillion was external debt.
The government will have to repay Rs 17,096 billion in principal in the coming fiscal year. It is estimated that Rs 4,531 billion will be required to repay external debt.
The borrowing strategy indicates greater reliance on long-term sources. The government has set a target of obtaining net new financing of Rs 4,580 billion through Pakistan Investment Bonds. In addition, it is planned to issue Sukuk worth Rs 6,600 billion.
The government also plans to introduce a 20-year fixed coupon bond. One of the objectives of this strategy is to further increase the average maturity of debt. According to the Ministry of Finance, this period was 2.7 years in June 2024, which increased to 3.8 years by June 2026. The target is to increase it to 4.2 years by 2028.
The total inflow for external financing is estimated at $13.3 billion. The volume of external borrowings and payments is expected to be $10.5 billion during the same period. It also includes plans to raise $4.9 billion from multilateral sources and $2 billion from international bonds.
According to the Ministry of Finance, interest expenses were recorded to decline by 22 percent in fiscal year 2026. The government has also decided to continue measures to increase the number of retail investors.
The debt plan figures show that the government will have to repay existing debts on a large scale with new financing in the coming fiscal year.
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