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Pakistan plans to borrow an additional Rs6.86 trillion in the current fiscal year to finance the budget deficit, according to the Ministry of Finance.
The government’s Annual Borrowing Plan 2027 shows a sharp rise in public debt. Total public debt reached Rs86.7 trillion at the end of June 2026.
The figure stood at Rs49.3 trillion in June 2022. Public debt has therefore increased by 76% over four years.
The total debt includes Rs59.4 trillion in domestic debt. External debt accounts for another Rs27.3 trillion in rupee terms.
The government expects to raise Rs6.046 trillion through domestic borrowing. It plans another Rs813 billion in external financing.
The federal fiscal deficit is projected at Rs7.02 trillion. The government expects gross financing needs to reach Rs28.647 trillion in FY27.
The figure equals about 20% of gross domestic product.
The Finance Ministry plans to reduce its reliance on short-term treasury bills.
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It will replace maturing T-bills with medium- and long-term debt instruments. The government plans net issuance of Rs4.58 trillion through Pakistan Investment Bonds.
Fixed-rate PIBs will account for more than half of new issuances. The government will limit floating-rate exposure to 10-year sukuk with variable returns.
The government also plans Rs3.785 trillion through Ijara Sukuk and Bai Muajjal.
Officials will use new hybrid sukuk and short-term sukuk structures to support the plan. Gross annual sukuk issuance could reach about Rs6.6 trillion.
The government will also continue issuing two-year and 15-year zero-coupon bonds.
It may introduce additional long-term instruments after consulting market participants and other stakeholders.
The government expects net external financing of Rs813 billion. The amount equals about $2.804 billion.
Multilateral lenders will provide the main source of external financing. The government expects net inflows of about $1.58 billion from these institutions.
Islamabad also plans to increase international capital market borrowing in FY27.
The government aims to raise more than $2 billion through Eurobonds or international sukuk. Officials will consider market conditions before issuing the debt.
The government raised $3 billion through Eurobonds last month.
Foreign commercial bank financing will also support external funding needs. The government plans to refinance existing facilities and secure new financing when market conditions allow.
Islamabad also expects Rs1.122 trillion through non-resident investments. These investments will include Naya Pakistan Certificates and government securities.
The government plans to maintain regular contact with international credit rating agencies.
For domestic borrowing, officials will increase the share of fixed-rate instruments. They also plan to expand sukuk, retail products and long-term bonds.
The ministry expects strong demand from institutional investors for zero-coupon bonds.
Commercial banks and non-bank financial institutions have shown interest in these instruments, according to the ministry.
Officials said the government would continue using zero-coupon bonds to improve the overall debt profile.
The government will also continue debt buybacks and debt-switch operations when fiscal space and market conditions allow.
The Finance Ministry said domestic sources financed an average of 81% of the fiscal deficit during FY17-FY26.
External sources financed the remaining 19%.
External financing accounted for 25% of the federal deficit in FY26. The ministry said this marked the highest share since FY20.
