Pakistan's external debt servicing falls 5% in Q3FY26

May 13, 2026 (MLN): Pakistan's external debt servicing eased to $3.86bn in the third quarter of fiscal year 2026, down from $4.07bn in the preceding quarter, according to data released by the State Bank of Pakistan (SBP).

This reflects a decline of roughly 5% quarter-on-quarter, driven largely by lower interest payments, which fell to $1.15bn in Q3 from $1.35bn in Q2. Principal repayments remained broadly stable, edging down marginally to $2.70bn from $2.72bn.

Servicing of public debt, which includes government obligations, IMF repayments and foreign exchange liabilities, was nearly flat at $3.30bn in Q3, compared with $3.32bn in Q2.

Within this, government debt repayments declined to $2.87bn in Q3 from $3.03bn in Q2. While principal repayments rose to $2.24bn from $2.09bn, interest payments fell sharply to $632m from $941m, driving the overall reduction.

Repayments to the International Monetary Fund rose during the quarter to $288m from $232m, largely reflecting higher principal payments, which increased to $171m from $119m.

 Foreign exchange liabilities servicing also climbed to $146m in Q3 from $57m in Q2, driven entirely by higher interest payments.

Debt servicing by public sector enterprises (PSEs) nearly doubled to $177m in Q3 from $92m in Q2. The increase was primarily attributable to a sharp rise in guaranteed debt repayments, which surged to $177m from $73m, while non-guaranteed debt servicing recorded no outflows during the quarter.

Bank borrowings remained negligible, edging up slightly to $13m in Q3 from $12m in the previous quarter.

In contrast, private sector external debt servicing declined significantly to $362m in Q3, down from $642m in Q2.

The drop was driven by lower principal repayments on non-guaranteed debt, which fell to $202m from $447m. Interest payments also moderated to $159m from $195m. As in the prior quarter, no servicing was recorded under guaranteed private sector debt.

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