Pakistan's Q1 fiscal surplus falls 40% to PKR 1.274 trillion
Lower State Bank profit transfers and higher interest and development spending narrowed the surplus, even as tax revenues rose during July-September
Business Desk
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Pakistan's fiscal surplus fell about 40% to PKR 1.274 trillion, equivalent to 0.9% of gross domestic product, in the first quarter of fiscal year 2026-27, from PKR 2.119 trillion a year earlier, according to Finance Ministry data released Friday.
Why did Pakistan's fiscal surplus shrink in Q1 FY27?
The fiscal surplus narrowed as non-tax revenue declined 14% and total government expenditure rose 16% from a year earlier. The largest drop in non-tax receipts came from lower profit transfers by the State Bank of Pakistan. Tax collections increased, but not enough to offset lower non-tax revenue and higher spending.
How did government revenue change?
Non-tax revenue fell to PKR 2.617 trillion from PKR 3.046 trillion in the corresponding quarter last year, a decline of 14%.
Profit transfers from the State Bank of Pakistan (SBP) decreased 20% to PKR 1.933 trillion from PKR 2.428 trillion, accounting for much of the decline in non-tax receipts.
Tax revenue, meanwhile, increased 7% to PKR 3.387 trillion.
Collections by the Federal Board of Revenue (FBR) also rose 7% to PKR 3.086 trillion during the July-September period.
Where did government spending increase?
Total government expenditure rose 16% to PKR 4.73 trillion from PKR 4.08 trillion in the same quarter a year earlier.
Mark-up payments on government debt increased 23% to PKR 1.7 trillion, while defense spending rose 11% to PKR 495 billion.
Combined federal and provincial development expenditure under the Public Sector Development Programme (PSDP) surged 59% to PKR 468 billion, compared with PKR 295 billion in the corresponding quarter of FY26.
Provincial PSDP spending accounted for approximately PKR 392 billion of the total, compared with PKR 75 billion at the federal level.
Pension spending increased 6% to PKR 264 billion, while spending on subsidies and grants fell 17% to PKR 366 billion.
What happened to Pakistan's primary surplus?
Pakistan recorded a primary surplus of PKR 2.974 trillion during the quarter, down 15% from PKR 3.497 trillion a year earlier.
The primary surplus, which excludes interest payments on government debt, amounted to 2.1% of GDP, compared with 2.7% in the corresponding quarter of FY26.
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