Govt Claims Early Repayment of Rs2.6 Trillion Loans, Saving Rs850 Billion in Interest
ISLAMABAD: The federal government has claimed a significant breakthrough in debt management, announcing the early repayment of **Rs2,600 billion loans** that reportedly saved the country **Rs850 billion in interest payments**. Officials also highlighted that Pakistan’s **debt-to-GDP ratio has improved**, dropping from 74% in FY2022 to 70% in FY2025.
According to a Finance Ministry statement issued on Tuesday, this is the first time in Pakistan’s history that such a large volume of loans has been repaid ahead of schedule. The ministry said this reduced refinancing and rollover risks while cutting interest costs, reflecting the government’s focus on fiscal discipline and sustainable debt management.
The ministry added that assessing debt sustainability requires measuring it against the size of the economy rather than looking at absolute figures, as inflation naturally increases total debt amounts. Under this standard, Pakistan’s debt position has improved.
Key highlights shared by the Finance Ministry include:
* Federal fiscal deficit reduced from **Rs7.7 trillion in FY2024** to **Rs7.1 trillion in FY2025**.
* Fiscal deficit as a percentage of GDP fell from **7.3% to 6.2%**.
* A record **primary surplus of Rs1.8 trillion** was achieved for the second consecutive year.
* Overall debt grew by 13% annually, compared to the previous five-year average of 17%.
* Public debt maturity improved from 4 years to 4.5 years; domestic debt maturity increased from 2.7 years to over 3.8 years.
* Interest payments were reduced by **Rs850 billion** against budgeted allocations.
The ministry also reported a positive impact on external accounts, with Pakistan recording a **\$2 billion current account surplus in FY2025**, the first in 14 years.
It clarified that the slight rise in external debt stemmed from facilities such as the IMF’s Extended Fund Facility and the Saudi Oil Fund, which do not require rupee outflows. Around Rs800 billion of the increase was attributed solely to currency depreciation, not fresh borrowing.
Would you like me to prepare a **short economic brief for business readers** (focusing on debt and fiscal numbers) or a **general news version** for wider public readership?
