ISLAMABAD (The COW News Digital) The federal government has prepared a plan to borrow Rs7.02 trillion during the current fiscal year to finance the budget deficit, while the Ministry of Finance has also finalized a three-year debt management strategy for 2026 to 2028.
According to the report, the government plans to raise a major portion of the required funds from domestic sources, with additional financing expected from external sources.
The government is expected to obtain around Rs6.046 trillion through domestic borrowing, while approximately Rs813 billion will be raised from external sources. The borrowing plan forms part of the government’s broader strategy to manage its financing requirements during the current fiscal year.
The Ministry of Finance has estimated that Rs161 billion could be generated through privatization during the year, providing another source of financing for government needs.
Within domestic borrowing, the government plans to raise around Rs4.58 trillion through Pakistan Investment Bonds. It also intends to obtain financing through Sukuk and other Islamic financial instruments as part of its domestic borrowing program.
The debt strategy covers the period from 2026 to 2028 and outlines the government’s preferred borrowing structure, including a greater focus on longer-term financing.
According to the Ministry of Finance report, Pakistan’s gross external borrowing during the current fiscal year is estimated at approximately $13.378 billion. Against this, external debt repayments are expected to reach around $10.574 billion.
After accounting for repayments, the government estimates net external financing of approximately $2.804 billion during the fiscal year.
The government has also set a target of issuing bonds worth $2 billion during the current fiscal year. The report notes that a $3 billion Eurobond has already been issued.
Under the three-year debt management strategy, the Ministry of Finance intends to prioritize long-term fixed-rate bonds and zero-coupon bonds. Short-term borrowing and floating-rate debt are expected to remain relatively limited under the strategy.
The government also plans to prioritize loans obtained on relatively favorable terms and financing instruments based on Shariah principles. The strategy further seeks to expand participation beyond traditional banking-sector investors.
The ministry said implementation of the debt strategy would depend on international economic conditions, geopolitical developments and the government’s ability to maintain fiscal discipline.
The borrowing plan comes as the federal government seeks to meet its financing requirements and cover the budget deficit during the current fiscal year.
Domestic borrowing remains a key component of the government’s financing strategy, with investment bonds and Islamic financial instruments expected to account for a substantial portion of planned borrowing.
The three-year strategy is intended to provide a framework for managing the government’s financing needs while considering the cost and maturity structure of public debt.
The Ministry of Finance is also expected to adjust its borrowing approach according to changes in global financial conditions and domestic fiscal requirements.
The latest plan highlights the scale of financing required by the federal government during the current fiscal year, with both domestic and external sources forming part of the overall borrowing strategy.
