Rs25.9 Trillion set aside for domestic debt repayment

Pakistan's National Assembly on Saturday approved more than Rs44.7 trillion ($159 billion) in charged expenditures for the fiscal year 2026-27, including allocations for debt servicing and repayment obligations, as lawmakers continued deliberations on the federal budget.

ISLAMABAD: Pakistan’s National Assembly on Saturday approved more than Rs44.7 trillion ($159 billion) in charged expenditures for the fiscal year 2026-27, including allocations for debt servicing and repayment obligations, as lawmakers continued deliberations on the federal budget.

The approved expenditures, classified as non-voteable or charged spending under the constitution, cover obligations that do not require approval through a vote of the lower house. Opposition lawmakers voiced concerns over the allocations during debate before the spending was cleared by the assembly.

According to budget documents presented by the federal government, more than Rs25.99 trillion has been allocated for the repayment of domestic debt, while over Rs5.83 trillion has been earmarked for the repayment of foreign debt.

The government has also set aside more than Rs6.98 trillion for interest payments on domestic debt, highlighting the significant burden of debt servicing on Pakistan’s public finances. In addition, over Rs1.07 trillion has been allocated for interest payments on external debt.

Budget documents showed that more than Rs130 billion would be used for the repayment of short-term external loans.

Pakistan has faced mounting fiscal pressures in recent years due to rising debt obligations, inflation and financing needs, prompting successive governments to pursue fiscal consolidation measures and economic reforms.

The approval of charged expenditures comes as lawmakers review broader budget proposals for the upcoming fiscal year, with the government aiming to maintain economic stability, increase revenues and meet financing commitments.

Opposition members questioned the scale of debt-related spending, arguing that large allocations for repayments and interest costs leave limited fiscal space for development and social welfare programmes.

The federal budget for fiscal year 2026-27 remains under discussion in parliament, where lawmakers are expected to debate taxation measures, development spending and economic policy priorities before its final passage.