Govt debt hits Rs77 trillion by end of October

Central govt liabilities up 11.4% YoY as domestic bonds soar

KARACHI:

Pakistan's central government debt increased by 0.5% month-on-month to Rs77 trillion in October 2025, marking an 11.4% rise compared with Rs69.1 trillion in October 2024.

The increase was driven primarily by domestic debt, which grew by 1% month-on-month to Rs53.98 trillion, up 14.3% from Rs47.23 trillion a year earlier, according to SBP data compiled by Arif Habib Limited.

Within domestic debt, long-term obligations rose by 1.2% month-on-month to Rs45.49 trillion, representing a 23% year-on-year increase. Permanent debt, which includes federal government bonds, increased by 1.2% month-on-month to Rs41.98 trillion, up 24.3% from October 2024. Federal government bonds alone accounted for Rs41.08 trillion, up 24.9% year-on-year.

Short-term domestic debt, in contrast, declined by 17.4% year-on-year to Rs8.41 trillion but remained nearly flat month-on-month. Naya Pakistan Certificates, a key government instrument, grew by 25.7% from September 2025 to reach Rs79 billion.

External debt of the central government reached Rs23 trillion, up 5.1% year-on-year but slightly lower by 0.8% compared with September 2025.

A trend analysis shows a steady increase in total central government debt over the past year, reflecting both fiscal pressures and ongoing financing requirements.

Meanwhile, the Pakistani rupee edged up against the US dollar, closing at 280.45 in the inter-bank market, up Rs0.01 from Wednesday's close at 280.46.

Gold prices in Pakistan decreased despite remaining largely flat in the international market, as investors adopted a cautious stance ahead of key US inflation data due on Friday.

According to the All-Pakistan Gems and Jewellers Sarafa Association, the price of gold declined Rs1,700 per tola to Rs441,462 and 10-gram gold fell by Rs1,457 to close at Rs378,482. Meanwhile, silver also saw a marginal decrease of Rs85, reaching Rs6,000 per tola.

Internationally, spot gold edged up 0.1% to $4,211.19 per ounce as of 1611 GMT, while US gold futures for February delivery gained 0.3% to $4,243.70 per ounce, according to Reuters. Analysts attributed the muted price movement to rising US Treasury yields offsetting support from a weaker dollar, as markets awaited the Fed's signals on interest rate policy.

Adnan Agar, Director at Interactive Commodities, commented, "The market is currently quiet. Gold is trading near its highs, with a low of $4,175 and a high of $4,218. Investors are closely watching the US monetary policy announcement next week, which is crucial for both year-end and the outlook for 2026." He added that there is a high probability, around 80%, that the Federal Reserve may cut rates, but the market is also focused on the Fed's projections for future rates and economic conditions. "Overall, the factors currently favour gold."

"If the $4,100 level holds, gold remains strong. Breaking that level could trigger a downward correction. As long as it stays above $4,100, there is a strong chance that gold could reach new highs by mid-December or early next year," Agar said.