The federal government has planned to borrow more than Rs6,789 billion during the new fiscal year under Budget 2026-27, while interest payments on old loans are expected to cross Rs8,000 billion, according to budget documents.
The documents show that debt servicing will remain one of the biggest pressures on federal finances in the coming year.
According to federal budget documents, the government’s total borrowing for the new fiscal year has been estimated at more than Rs6,789 billion.
The borrowing plan includes funds required to meet development, program and other financial needs during the fiscal year.
Interest payments to exceed Rs8,000bn
The government will pay Rs8,054 billion in interest on old loans in the next fiscal year. Of this amount, interest payments on local loans have been estimated at Rs6,983 billion, while interest on foreign loans will stand at Rs1,071 billion.
The figures reflect the growing burden of domestic and external debt on the federal budget.
According to the budget document, the federal government will receive Rs574 billion in project loans and grants. In addition, external loans worth Rs418 billion will be taken in the form of program loans.
These funds are expected to support development projects and broader fiscal requirements.
Other loans also part of plan
The budget document states that the government also plans to take additional loans of Rs5,542 billion to meet other financial needs.
External grants worth Rs31 billion are also expected to be received during the next fiscal year.
