Pakistan’s government recorded net borrowing of Rs1.05 trillion during the week ended June 26, 2026, taking total net borrowing in FY2026-27 to Rs2.97 trillion, according to the latest data released by the State Bank of Pakistan (SBP). The increase was largely driven by borrowing for budgetary support, while the government continued reducing its reliance on direct financing from the central bank.
KARACHI: The Government of Pakistan added Rs1.05 trillion to its domestic debt during the week ended June 26, 2026, pushing total net borrowing for FY2026-27 to Rs2.97 trillion, according to the latest weekly estimates published by the State Bank of Pakistan (SBP).
The data highlights the government’s continued dependence on domestic financing to meet fiscal requirements, with budgetary support accounting for the overwhelming share of fresh borrowing.
Budgetary Support Accounts for Most of the Weekly Borrowing
According to the SBP, government borrowing is classified into three categories: budgetary support, commodity operations, and other purposes.
During the reporting week, borrowing was distributed as follows:
| Category | Weekly Borrowing |
|---|---|
| Budgetary Support | Rs1.048 trillion |
| Commodity Operations | Rs599 million |
| Others | Rs5.11 billion |
| Total Net Borrowing | Rs1.05 trillion |
The sharp rise in budgetary borrowing reflects the government’s financing needs at the beginning of the new fiscal year as it manages expenditures and implements budget commitments.
Cumulative FY27 Borrowing Nears Rs3 Trillion
Following the latest increase, cumulative borrowing for budgetary support has reached approximately Rs3.02 trillion during FY2026-27.
Meanwhile, commodity operations recorded a net retirement of Rs51.4 billion, indicating that repayments exceeded fresh borrowing.
Borrowing under the other category stood at Rs1.53 billion.
The cumulative borrowing position is as follows:
| Category | Cumulative Position |
|---|---|
| Budgetary Support | Rs3.02 trillion |
| Commodity Operations | Rs51.4 billion retired |
| Others | Rs1.53 billion borrowed |
| Net Government Borrowing | Rs2.97 trillion |
The figures show that budgetary support continues to account for nearly all of the government’s financing requirements.
Government Continues to Reduce Borrowing from SBP
The SBP data indicates that the government has continued its policy of reducing direct borrowing from the central bank.
During FY2026-27, the government retired a net Rs3.08 trillion owed to the State Bank of Pakistan.
The repayments included:
- Federal Government: Rs2.67 trillion retired
- Provincial Governments: Rs360.98 billion retired
- Azad Jammu and Kashmir (AJK): Rs34.41 billion retired
- Gilgit-Baltistan (GB): Rs17.07 billion retired
The continued retirement of central bank debt aligns with broader fiscal and monetary reforms aimed at limiting direct government borrowing from the SBP.
Scheduled Banks Provide More Than Rs6 Trillion
While reducing liabilities to the central bank, the government significantly increased financing through scheduled commercial banks.
According to the latest SBP estimates, the government has secured Rs6.10 trillion in net financing from commercial banks during FY2026-27.
The Federal Government accounted for the majority of the borrowing, raising approximately Rs6.31 trillion from scheduled banks.
In contrast, provincial governments recorded a net retirement of Rs207.75 billion, reducing their outstanding borrowing from commercial banks.
The trend reflects the government’s strategy of relying more heavily on market-based financing through the domestic banking sector.
Domestic Borrowing Remains Central to Fiscal Management
Domestic borrowing continues to play a vital role in financing Pakistan’s fiscal operations, particularly during the early stages of the fiscal year when expenditure requirements are typically elevated.
Budgetary support remains the largest component of government borrowing, helping finance development projects, operational spending, debt servicing, and other budgeted obligations.
The latest SBP data also indicates continued adherence to the government’s policy of reducing direct central bank financing while increasing reliance on commercial banks.
Economists generally view this approach as supportive of monetary discipline, although sustained borrowing from scheduled banks could influence liquidity conditions and private sector credit availability in the months ahead.
As FY2026-27 progresses, government borrowing trends will remain closely monitored by investors, policymakers, and financial markets for their implications on public debt management, fiscal sustainability, and overall macroeconomic stability.