The government of Pakistan acquired additional debt worth Rs99.79 billion during the week ended December 5, 2025, according to the State Bank of Pakistan’s (SBP) weekly estimates. Despite the fresh borrowing, the overall fiscal picture for the ongoing financial year reflects significant net repayments, with cumulative net retirement standing at Rs615.76 billion in fiscal year 2026 so far.
The SBP data shows that government sector borrowing is categorized into three primary purposes: budgetary support, commodity operations, and other miscellaneous needs. During the reported week, net borrowing for budgetary support amounted to Rs101.66bn, while commodity operations recorded a net retirement of Rs1.85bn. Additionally, Rs27 million was retired under the “others” category.
On a cumulative basis for FY26, the government has retired Rs634.54bn against budgetary support, while borrowing for commodity operations stands at Rs20.14bn. The “others” category has seen a net retirement of Rs1.36bn. These figures underline a broader trend of fiscal consolidation, even as short-term borrowing requirements continue to arise.
The central bank and scheduled banks remain the two largest sources of financing for the government’s budgetary needs. According to the SBP, the government has retired a net Rs552.22bn to the State Bank of Pakistan during the current fiscal year. This figure reflects varied positions across different tiers of government. The federal government alone retired Rs764.49bn to the SBP, while provincial governments collectively borrowed Rs244.16bn. In contrast, the Azad Jammu and Kashmir government retired Rs19.02bn, and the Gilgit-Baltistan government retired Rs12.87bn during the same period.
Scheduled banks also show a net repayment trend. Overall, the government retired Rs82.32bn to scheduled banks in FY26 so far. Within this, the federal government borrowed Rs1.09bn, while provincial governments retired a significantly larger amount of Rs83.41bn. The contrasting borrowing behavior between federal and provincial governments reflects differing liquidity needs and fiscal strategies across levels of government.
Analysts view the continued net retirement of debt as a positive signal for macroeconomic stability, particularly in the context of Pakistan’s commitments under ongoing stabilization and reform programs. Repayments to the central bank help reduce reliance on direct monetary financing, which has historically fueled inflationary pressures.
At the same time, the persistence of weekly borrowing for budgetary support highlights ongoing fiscal challenges, including revenue constraints and expenditure pressures. While commodity operations have remained relatively contained, budgetary financing continues to drive short-term fluctuations in government borrowing.
The SBP’s weekly estimates provide an important snapshot of fiscal discipline and liquidity management. As FY26 progresses, market participants will closely monitor whether the government can sustain net debt retirement while meeting development and social spending needs, particularly amid evolving economic conditions and policy priorities.
Follow the PakBanker Whatsapp Channel for updates across Pakistan’s banking ecosystem.