Pakistan’s external debt servicing rises above $4bn in Q2FY26

February 11, 2026 (MLN): Pakistan’s external debt servicing climbed to $4.07 billion in the second quarter of fiscal year 2026, up from $3.55 billion in the preceding quarter, according to data released by the State Bank of Pakistan (SBP).

This reflects higher repayments by the government and private sector, an increase of roughly 15% quarter-on-quarter that was driven largely by principal repayments, which rose to $2.72 billion in Q2 from $2.35 billion in Q1.

Interest payments also edged higher to $1.35 billion, compared with $1.19 billion in the previous quarter.

Servicing of public debt, which includes government obligations, IMF repayments and foreign exchange liabilities, rose to $3.32 billion in Q2 from $2.92 billion in Q1.

Within this, government debt repayments accounted for the bulk of the outflows, increasing to $3.03 billion in Q2, compared with $2.46 billion in the prior quarter.

Principal repayments on government debt surged to $2.09 billion from $1.80 billion, while interest payments rose to $941 million from $661 million.

Repayments to the International Monetary Fund declined during the quarter, falling to $232 million from $330 million, largely due to a drop in principal payments.

Foreign exchange liabilities servicing also eased to $57 million in Q2, compared with $132 million in Q1, reflecting lower interest payments.

Debt servicing by public sector enterprises (PSEs) declined sharply to $92 million in Q2 from $195 million in Q1.

The drop was mainly attributable to lower repayments on guaranteed debt, which fell to $73 million from $177 million.

Servicing of bank borrowings also moderated to $12 million in Q2, down from $26 million in the previous quarter.

In contrast, private sector external debt servicing rose significantly to $642 million in Q2, up from $407 million in Q1.

The increase was driven by higher principal repayments on non-guaranteed debt, which climbed to $447 million from $237 million. Interest payments also rose to $195 million from $169 million.

There was no servicing recorded under guaranteed private sector debt during the period.

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