The federal government’s total debt stock fell by Rs456 billion in October 2024, driven by record profit remittances from the State Bank of Pakistan (SBP) and continued debt servicing.
According to data released by the State Bank of Pakistan, total debt stood at 69.114 trillion rupees at the end of October, down from 69.570 trillion rupees in September 2024.
The decline came in the wake of the State Bank of Pakistan’s record profit transfer of more than 3 trillion rupees to the government earlier this year. Domestic debt saw the biggest decline, falling by 305 billion rupees to 47.231 trillion rupees in October, compared to 47.536 trillion rupees in the previous month.
External debt, calculated in rupees, fell by 150 billion rupees to 21.884 trillion rupees in October. Exchange rate fluctuations had little impact, with the dollar averaging Rs 277.85 in October.
Despite the monthly decline, the debt stock has risen since the beginning of the year by 200 billion rupiah, rising from 68.914 trillion rupiah in June to 69.114 trillion rupiah in October. Analysts pointed to an 11% year-over-year increase in total federal debt by the end of October, highlighting the need for continued fiscal discipline to manage debt sustainably.
The government repaid $571 million in foreign debt during the month of October. The State Bank of Pakistan reported that lower interest rates reduce the government’s domestic debt servicing costs, contributing to financial savings. The government’s interest expenditure target for FY25 is Rp9.8 trillion, but is now expected to be less than Rp8.5 trillion, saving Rp1.3 trillion, or 1% of GDP.