Karachi, October 31, 2024 – In a landmark development, Pakistan has reported its first budget surplus in decades, marking a significant turnaround for the nation’s economic landscape. The surplus, recorded at 1.4% of the GDP for the first quarter (July-September) of the fiscal year 2024-25, reflects an amount of PKR 1.7 trillion. This achievement comes amid Pakistan’s longstanding struggle with fiscal deficits and spiraling debt.
Primary surplus figures were even more striking, standing at PKR 3 trillion or 2.4% of the GDP. The surplus reflects the robust financial management and strategic revenue measures undertaken by Pakistan’s economic planners and policymakers. According to Mohammad Sohail, CEO of Topline Securities, this fiscal improvement is largely attributable to an increase in non-tax revenues, which surged to PKR 3 trillion. This revenue included a substantial PKR 2.5 trillion from the State Bank of Pakistan (SBP), which has become an essential contributor to the country’s fiscal coffers.
Pakistan’s previous economic performance provides context for the significance of these recent gains. During the same period last year, the country recorded a budget deficit of 0.9% of GDP in the first quarter of the fiscal year 2023-24. The SBP’s profit contribution was recorded later in the fiscal year last time, credited to the government in the second quarter at PKR 972 billion.
The finance ministry’s latest fiscal report for the first quarter of 2024-25 offers a comprehensive view of the country’s revenue landscape. Total revenue surged to PKR 5.83 trillion, which included tax revenue of PKR 2.77 trillion and non-tax revenue of PKR 3.05 trillion. In stark contrast, the previous year’s first-quarter revenue stood at PKR 2.68 trillion, comprising PKR 2.22 trillion in tax revenue and only PKR 469 billion in non-tax revenue. The substantial increase in non-tax revenue this year reflects enhanced returns from state-owned enterprises and effective monetization strategies by the government.
Expenditure for the first quarter of the fiscal year 2024-25 was recorded at PKR 4.13 trillion, which included both current and development spending. This represents an increase from the PKR 3.66 trillion expenditure in the same quarter last year, indicating a continued commitment to development while maintaining fiscal discipline.
Pakistan’s historic budget surplus is an optimistic indicator for the country’s future economic trajectory. As the nation looks forward to maintaining this momentum, the government’s ability to sustain non-tax revenue inflows, coupled with prudent spending, will be critical in transforming Pakistan’s economy into one with fiscal stability and sustainable growth.