Pakistan posts first primary surplus in 20 years

Pakistan posted a primary surplus in fiscal year 2023-2024, the first in 20 years, data from the Ministry of Finance showed.

Pakistan achieved a primary surplus of Rs953 billion, or 0.9% of the GDP, in FY24, according to the data. The last primary surplus was recorded in FY04, amounting to Rs67 billion, or 1.5% of the GDP.

Pakistan reported a budget deficit of Rs7.21 trillion for FY24, representing 6.8% of the GDP. This deficit is 11% higher than the previous year.

The primary balance, which is the budget balance excluding interest payments on borrowings, indicates the government’s fiscal health excluding debt servicing costs.

Markup payments in the country surged by 43% to Rs8.16 trillion in FY24, with domestic debt servicing costs rising by 45% YoY to Rs7.16 trillion. This increase is attributed to higher interest rates and a larger domestic debt stock.

Pakistan’s domestic debt and liabilities grew by 18%, reaching Rs46.75 trillion in May 2024, up from Rs39.66 trillion in June 2023.

Additionally, debt servicing on foreign debt rose by 31% YoY to Rs996 billion in FY24. Pakistan’s external debt increased to $77.6 billion in May 2024, compared to $76.9 billion in June 2023.