The federal government has projected gross financing needs of Rs28.647 trillion for fiscal year 2026-27, equal to around 20 percent of GDP.
The Annual Borrowing Plan for FY2026-27 was prepared by the Debt Management Office. It estimates the government’s fiscal deficit at Rs7.02 trillion.
The government plans to meet most of its financing requirements through domestic borrowing. Net domestic financing is projected at Rs6.046 trillion.
External financing is expected to contribute Rs813 billion. Another Rs161 billion is projected from privatisation proceeds.
Government Plans Longer-Term Borrowing
The borrowing strategy includes a major shift toward medium- and long-term debt instruments.
The government plans to reduce dependence on short-term Treasury Bills. The move is aimed at lowering refinancing risks and extending the maturity profile of public debt.
The plan includes net issuance of Rs4.58 trillion in Pakistan Investment Bonds. Fixed-rate PIBs are expected to account for more than half of new issuances.
The government also plans around Rs3.785 trillion through Government Ijara Sukuk, Bai Muajjal and short-term Sukuk.
Gross Sukuk issuance is projected at approximately Rs6.6 trillion during the fiscal year.
Rs21.627 Trillion Debt Maturities
The financing challenge is also driven by substantial debt repayments.
The government faces Rs21.627 trillion in debt maturities during FY2026-27. This includes Rs17.096 trillion in domestic debt maturities and Rs4.531 trillion in external repayments.
The borrowing plan also proposes a 20-year fixed-coupon bond after consultations with stakeholders.
The government intends to replace the existing 10-year zero-coupon floating-rate instrument with a 10-year fixed-rate bond.
The plan assumes an exchange rate of Rs290 against the US dollar. Officials noted that successful implementation will depend on economic conditions, geopolitical developments and continued fiscal discipline.
