Pakistan posts PKR 4.1T primary surplus meeting key IMF demand

Pakistan has met most of the key conditions set by the International Monetary Fund, particularly fiscal discipline, according to financial data for the first six months of the current financial year.

The government managed a primary surplus PKR 4.1 trillion – equivalent to 3.2% of gross domestic product (GDP) – against the target of PKR 3.2 trillion.

The surplus was largely driven by the full realisation of the central bank's estimated annual profit, amounting to PKR 2.43 billion over the six-month period.

Overall fiscal data showed a surplus of 0.4% of GDP for the six months till December, while the primary balance remained in surplus at 3.2% of GDP. The government posted a deficit amounting to 1.4% of GDP and a primary surplus of 3.1% of GDP in the same period last year.

A senior Finance Ministry official said the fiscal performance reflected “strong expenditure control and improved revenue mobilization under the IMF-supported reform program.”

Fiscal operations data released by the Finance Division showed that debt servicing continued to significantly outpace defense and development spending.

Debt servicing amounted to PKR 3.56 trillion during the period, compared with PKR 1.04 trillion spent on defense and PKR 238 billion under the Public Sector Development Programme (PSDP).

However, debt servicing was lower compared with last year level of PKR 5.14 billion. The main reasons have been the cut in the benchmark interest rate and the government's move to reduce borrowing through short-term papers and debt reprofiling.

The statistical discrepancy persisted at PKR 413.3 billion in the first half of the current fiscal year, slightly lower than PKR 439.7 billion recorded in the same period last year.

Punjab accounted for PKR 144.4 billion of the total provincial discrepancy of PKR 342 billion.

Pakistan recorded an overall fiscal surplus of PKR 542 billion during the July–December period of the current fiscal year, reversing a deficit of PKR 1.54 trillion in the corresponding period of the previous year.

Revenue collection

Total revenues reached PKR 10.68 trillion in the first six months of fiscal year 2025-26, the Ministry of Finance data showed. Of this, the Federal Board of Revenue collected PKR 6.16 trillion, while non-tax revenues stood at PKR 3.95 trillion.

Among non-tax revenues, the petroleum levy contributed PKR 823 billion.

The State Bank of Pakistan's profit, paid in the first quarter, was the single largest component at PKR 2.43 trillion. Other sources included PKR 8.8 billion from the captive power plants levy, PKR 25.5 billion from the carbon levy, PKR 24.8 billion in Pakistan Telecommunication Authority profit, PKR 61.1 billion in oil and gas royalties, PKR 26.7 billion in passport fees, PKR 32.3 billion from the natural gas development surcharge and PKR 17 billion in receipts from the Islamabad Capital Territory administration.

Gross federal revenue receipts totaled PKR 10.008 trillion, leaving net revenue receipts of PKR 6.39 trillion during the July–December period.

Federal government expenditure amounted to PKR 7.03 trillion, of which PKR 6.84 trillion was current expenditure. Domestic debt servicing amounted to PKR 3.09 trillion, while foreign debt repayment totaled PKR 474.3 billion.

Other major expenditures included PKR 504 billion for pensions, PKR 380.6 billion for running the government, PKR 462.6 billion in subsidies and PKR 880 billion in grants to provinces and other entities.