ISLAMABAD: Pakistan’s public debt fell by more than Rs1,371 billion ($4.86 million) from July till Sept. this year in a first such decline since 2019, the country’s Finance Adviser Khurram Schehzad said on Monday, adding that this is also the largest drop in public debt.

Pakistan’s public debt has remained a central focus of economic policymaking in recent years, driven by persistent fiscal deficits, heavy interest obligations, and repeated external borrowing cycles.

The country’s debt stock had been on a steady upward trajectory due to currency depreciation, high domestic interest rates, and large financing needs tied to energy sector arrears, subsidies, and external repayments.

Multilateral lenders have repeatedly cautioned that without sustained fiscal discipline and structural reforms, the debt burden would continue to strain Pakistan’s macroeconomic stability.

“Pakistan’s total public debt has fallen from Rs80,518 billion (June 2025) to Rs79,146 billion (September 2025) — a decline of over Rs1,371 billion ($4.86 billion),” Schehzad said on X.

“[This is] first quarterly decline in 69 months (since Dec 2019), marking a notable shift in debt dynamics,” he said, “[and] largest quarterly reduction ever in both absolute value and percentage decline (QoQ).”

The development comes amid some signs of macroeconomic stability in the country, which is navigating a long path to economic recovery under a $7 billion International Monetary Fund (IMF) program.

It also comes months after officials said the country had retired Rs2,600 billion ($9.2 billion) debt to central and commercial banks in less than one year.

The decline stemmed from disciplined fiscal management and the strategic deployment of surplus funds to repay expensive debt ahead of schedule, according to the finance adviser.

It will help lower future borrowing needs, reduce refinancing and rollover risks along with strengthening medium-term financial stability.

“[It] sends a signal of improving policy credibility and investor confidence,” he said. “Over time, lower debt servicing can free fiscal space for development, social protection and growth-enhancing priorities.”