Pakistan’s external debt payments reach $21.5 billion for FY2027, Finance Secretary says

Pakistan is scheduled to make total external debt payments of $21.5 billion during fiscal year 2026-27 including repayments of principal and interest according to the Finance Secretary.

Pakistan is scheduled to make total external debt payments of $21.5 billion during fiscal year 2026-27 including repayments of principal and interest according to the Finance Secretary.

In a statement issued from Islamabad on Wednesday the Finance Secretary said the overall amount comprises $17.5 billion in principal repayments and another $4 billion in interest payments. However arrangements involving debt rollovers and commercial refinancing have substantially reduced the amount the country needs to pay from its own resources during the year.

The statement said bilateral debt rollovers had eased the repayment burden by approximately $7.3 billion. Without these arrangements Pakistan’s external debt payments would stand at around $14 billion.

A further reduction of $3.2 billion was achieved through commercial refinancing of external loans. After accounting for both rollovers and refinancing arrangements the country’s net external debt payments for FY2027 are estimated at approximately $11 billion.

Pakistan has already paid around $5 billion towards its external obligations during the first four months of the current fiscal year. A further $6 billion in payments is expected over the remaining months according to the Finance Secretary.

The government is also working to improve the structure and sustainability of public debt by extending its average maturity period. The statement noted that the average maturity of domestic debt reached 3.8 years in June 2026.

A target has been set to increase this period to 4.2 years by fiscal year 2027-28 which would help spread repayment obligations over a longer period.

The Finance Secretary said the government also planned to broaden the investor base for public borrowing. Another key objective is to keep the share of external debt below 40% of total government debt.

The figures highlight the scale of Pakistan’s external financing commitments while the use of rollovers and refinancing remains important in managing immediate repayment pressures. The government’s targets indicate an effort to improve debt management and reduce exposure to external borrowing risks over the coming years.