KEY POINTS
- Pakistan posted its first fiscal surplus in 24 years, reaching Rs 1.896 trillion (1.7% of GDP) in Q1 FY2025.
- Primary balance hit a record 3.0% surplus of GDP, reflecting strong fiscal consolidation.
- Total revenue surged 36.7% to Rs 13.37 trillion, driven by tax reforms and booming non-tax income.
- Provinces contributed a record Rs 1.05 trillion surplus, doubling last year’s figure through improved coordination.
ISLAMABAD: Pakistan has posted its first fiscal surplus in over two decades, achieving a Rs 1.896 trillion surplus—equivalent to 1.7% of GDP—in the first quarter of FY2025, according to the Pakistan Economic Survey 2024–25 released Monday.
This historic achievement reflects the impact of aggressive fiscal reforms centred on revenue mobilization, strict expenditure management, and improved provincial coordination, Senator Muhammad Aurangzeb, minister for finance and revenue told reporters during a press conference.
The fiscal deficit has been on a consistent downward trajectory, narrowing from 3.8% of GDP in FY2022 to 3.7% in the following two years, and further to 2.6% during July–March FY2025.
Even more striking is the turnaround in the primary balance (excluding interest payments), which has climbed from a deficit of 0.7% in FY2022 to a record surplus of 3.0% of GDP in FY2025—the highest in Pakistan’s fiscal history.
Revenue Surge Powers Recovery
Total government revenue surged 36.7% year-on-year to Rs 13.37 trillion, buoyed by a combination of tax and non-tax measures.
Tax revenues grew by 25.8% to Rs 9.14 trillion, aided by reforms under the Finance Act 2024.
Non-tax revenues, driven by higher petroleum levies, dividends, and State Bank profits, soared 68% to Rs 4.23 trillion.
The Federal Board of Revenue (FBR) also delivered a robust performance, with net tax collection reaching Rs 10.23 trillion during July–May FY2025, marking a 25.9% increase from the previous year.
Provinces Contribute to Fiscal Gains
For the first time in years, the provinces recorded a combined surplus of Rs 1.05 trillion—more than double the Rs 435.4 billion posted in the previous year—indicating stronger fiscal coordination and execution across all levels of government.
Renewed Development Focus
While total expenditures rose 19.4% to Rs 16.34 trillion, the increase was largely driven by development spending, which rose 28.6% to Rs 413 billion under the Federal PSDP.
Current expenditures were contained at Rs 14.59 trillion, rising 18.3% year-on-year.
