Rs2.6tr debt repaid ahead of schedule: Schehzad
Finance Minister’s Advisor Khurram Schehzad. SCREENGRAB
Pakistan has retired Rs2.6 trillion in public debt well ahead of schedule, Advisor to Finance Minister Khurram Schehzad announced on Sunday.
In a post shared on X (formerly Twitter), Schehzad revealed that around Rs1.6 trillion was paid back to the State Bank of Pakistan (SBP) in just 59 days—an achievement he termed as “historic fiscal discipline”.
Historic Move: Pakistan Retires PKR 2,600 Billion Debt Before Time — A First in Pakistan's History
In an unprecedented move and a record achievement for fiscal responsibility, the Ministry of Finance (MoF), Government of Pakistan (GoP), has retired over PKR 1,600 Billion of…The finance ministry, he said, repaid Rs500 billion on June 30, 2025, followed by a second repayment of Rs1,133 billion on August 29, bringing total early SBP repayments to Rs1,633 billion.
He also highlighted a previous Rs1,000 billion repayment to the domestic commercial market during the first half of the fiscal year, calling it Pakistan’s first-ever advanced domestic debt retirement operation.
“Including both the central bank and commercial portions, the total early debt retirement in less than one year now comes to over PKR 2,600 billion — an unprecedented scale and decisive action in the country’s fiscal history,” the advisor stated.
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Schehzad added that this marks a fundamental shift in fiscal management away from “debt-heavy practices” that previously squeezed development space. He noted that 30% of SBP debt has now been retired early—cutting the stock from Rs5.5 trillion to Rs3.8 trillion—well before its scheduled maturity in 2029.
“Early repayments eased the 2029 refinancing burden, lowered rollover risks, and created more room for development spending,” he said.
According to Schehzad, the average maturity of domestic debt has also improved sharply—from 2.7 years in 2024 to 3.8 years—marking the most significant single-year improvement in the country’s history and exceeding the International Monetary Fund's (IMF) targets.
He further claimed that the government had already saved over Rs800 billion in taxpayer money this fiscal year through falling interest rates and disciplined repayments.
“By reversing a cycle of unchecked borrowing and prioritising repayments, Pakistan is restoring fiscal credibility and building long-term resilience,” he concluded.