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Pakistan posts PKR 2.1 trillion budget surplus in FY26's first quarter

Higher non-tax revenues, including central bank profits, drive surplus equal to 1.6% of GDP, though analysts warn sustainability remains uncertain

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Haris Zamir

Business Editor

Experience of almost 33 years where started the journey of financial journalism from Business Recorder in 1992. From 2006 onwards attached with Television Media worked at Sun Tv, Dawn Tv, Geo Tv and Dunya Tv. During the period also worked as a stringer for Bloomberg for seven years and Dow Jones for five years. Also wrote articles for several highly acclaimed periodicals like the Newsline, Pakistan Gulf Economist and Money Matters (The News publications)

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Pakistan posts PKR 2.1 trillion budget surplus in FY26's first quarter
A stack of Pakistani rupee notes
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Pakistan recorded a budget surplus of PKR 2.1 trillion, equivalent to about 1.6% of gross domestic product (GDP), during the first quarter of fiscal year 2025-26 (July-September), according to a document released by the Finance Division.

The summary of consolidated federal and provincial fiscal operations shows that total revenue stood at PKR 6.2 trillion (4.8% of GDP), while total expenditure amounted to PKR 4.1 trillion (3.1% of GDP) in the first quarter.

As a result, the country posted a budget surplus of PKR 1.2 trillion (1.6% of GDP). Meanwhile, the primary balance, which excludes interest payments, recorded a surplus of PKR 3.5 trillion (2.7% of GDP).

Of the total revenue of PKR 6.1 trillion, tax collection by the Federal Board of Revenue (FBR) was PKR 2.88 trillion, while non-tax collection stood at PKR 3.046 trillion for the period. The non-tax receipts included:

  • Mark-up (PSEs and others): PKR 13.3 billion
  • Dividend: PKR 26.6 billion
  • Profit PTA and others: PKR 17.3 billion
  • Surplus profit of the State Bank of Pakistan: PKR 2.4 trillion
  • Defense receipts: PKR 6.5 billion
  • Passport fee: PKR 14.1 billion
  • Discount retained on crude oil: PKR 4.7 billion
  • Royalties on oil and gas: PKR 22.8 billion
  • Windfall levy against crude oil: PKR 9.2 billion
  • Petroleum levy on LPG: PKR 0.818 billion
  • Gas infrastructure development cess: PKR 0.603 billion
  • Natural gas development surcharge: PKR 7.9 billion
  • Petroleum levy: PKR 371.6 billion
  • Other receipts: PKR 46.5 billion.

Current expenditure during the quarter was PKR 4.047 trillion, including total interest payments of PKR 1.38 trillion (domestic mark-up PKR 1.18 trillion, foreign PKR 201.2 billion).

Other major expenditures included pensions at PKR 672.6 billion, running of civil government at PKR 558.8 billion, defense at PKR 447.5 billion, subsidies at PKR 119.6 billion, and grants to others at PKR 319 billion.

The four provincial governments collectively recorded a budget surplus of PKR 781 billion in FY26's first quarter, with combined revenues of PKR 2.22 trillion and expenditures of PKR 1.44 trillion.

An independent analyst said: “The appearance of a budget surplus in Q1 is encouraging and reflects some improvement in revenue mobilization and expenditure control.

“However, the sustainability of this surplus will depend on external factors such as exchange rate stability, foreign inflows, and oil import costs, as well as the government’s discipline in non-core expenditures.

“With large interest payments already built into the budget, the fiscal space remains tight unless structural reforms accelerate.”

Overall, while the headline surplus is a positive sign, analysts caution that the reliance on one-off non-tax revenues, including central bank profits, and high debt servicing pressures could limit the government’s ability to sustain this fiscal position through the remainder of the year.

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