Pakistan borrowed Rs858bn in first five months of FY2025-26

ISLAMABAD: The Pakistan government raised Rs858 billion in loans between July and November of the current fiscal year 2025-26, ARY News reported on Wednesday, quoting official documents.

Data released by the Economic Affairs Division shows that Rs144 billion was borrowed in November alone.

During the same five-month period of the previous fiscal year, total borrowing stood at Rs741 billion, indicating an increase of more than Rs117 billion year-on-year.

The documents further show that in November the government secured an additional $40 million compared with October 2025. Of the total inflows during the month, $314.5 million was obtained under bilateral and multilateral agreements, while $196.9 million was raised through the issuance of New Pakistan Certificates.

Month-wise figures indicate that the government borrowed Rs198 billion in July and Rs192 billion in August. This was followed by Rs124 billion in September and Rs133 billion in October.

In a major step toward resolving the persistent circular debt in Pakistan’s power sector, the federal government signed a Rs1.275 trillion financing agreement with a consortium of 18 commercial banks at reduced interest rates in September 2025.

The signing ceremony took place at the Prime Minister’s Office (PMO) in Islamabad, while Prime Minister Shehbaz Sharif virtually attended the event from New York, where he is participating in the United Nations General Assembly session.

The financing arrangement secures Rs1.275 trillion from commercial banks at an interest rate of 3-month KIBOR (the benchmark rate banks use to price loans) minus 0.9%.