ISLAMABAD — The federal government plans to borrow Rs7.02 trillion during the current fiscal year to bridge the budget deficit, with the Ministry of Finance issuing a three-year debt management strategy covering 2026 to 2028.
Domestic Sources to Cover Bulk of Financing
Under the borrowing plan, the government will raise Rs6.046 trillion from domestic sources and Rs813 billion from external sources, according to the Ministry of Finance.
Within domestic borrowing, the government plans net borrowing of Rs4.58 trillion through Pakistan Investment Bonds, while Rs3.785 trillion is earmarked through Sukuk and other Islamic financing instruments.
The government also estimates it will receive Rs161 billion through privatisation during the current fiscal year.
External Borrowing and Repayments
Total external borrowing during the fiscal year is estimated at $13.378 billion, while repayments are expected to amount to $10.574 billion, leaving net external financing of around $2.804 billion.
The government has set a target of issuing $2 billion in bonds during the current fiscal year, while a $3 billion Eurobond has already been issued.
Medium-Term Debt Strategy for 2026-28
The Ministry of Finance has finalised its Medium-Term Debt Management Strategy for 2026-28, aimed at managing borrowing needs while extending the maturity profile of government debt.
The strategy focuses on increasing net issuance of Pakistan Investment Bonds, particularly fixed-rate and zero-coupon bonds, while limiting short-term and floating-rate borrowing.
Key priorities under the three-year plan include:
- Prioritising long-term fixed-rate and zero-coupon bonds
- Keeping short-term and floating-rate borrowing limited
- Extending debt maturities and reducing exposure to interest-rate and currency risks
- Giving preference to concessional long-term financing and Shariah-compliant bonds
- Encouraging greater participation by investors other than banks
Implementation Subject to Global Conditions
According to the Ministry of Finance, implementation of the debt strategy will remain subject to global economic conditions, geopolitical developments and fiscal discipline.
