Pakistan recorded its lowest fiscal deficit in at least 27 years during July–March of the current fiscal year after high provincial surpluses, large petroleum levy collections and less interest payments.
Data released by the Ministry of Finance showed the deficit stood at Rs. 856 billion compared to Rs. 2.97 trillion during the same period last year, an improvement of 71 percent.
The fiscal year began with a Rs. 2.1 trillion surplus, which narrowed to Rs. 542 billion by mid-year before turning into a deficit by the end of the third quarter.
Provincial governments provided the largest combined cash surplus of Rs. 1.636 trillion during the first nine months, exceeding the full-year target of Rs. 1.464 trillion.
Punjab returned a surplus of Rs. 824 billion, followed by Sindh with Rs. 441 billion, Khyber Pakhtunkhwa Rs. 253 billion and Rs. 118 billion from Balochistan.
The petroleum development levy became the government’s top revenue source, rising 45 percent to Rs. 1.205 trillion from less than Rs. 835 billion a year earlier.
Profits transferred by the State Bank of Pakistan also remained strong.
Interest payments declined sharply by nearly Rs. 1.5 trillion to Rs. 4.948 trillion compared with Rs. 6.44 trillion last year. The primary surplus reached 3.2 percent of GDP to Rs. 4.1 trillion.
The overall revenue-to-GDP ratio fell to 11.4 percent from 11.7 percent last year, while tax revenues declined to 7.8 percent of GDP and non-tax revenues slipped to 3.6 percent.
Direct taxes remained unchanged at 3.6 percent of GDP, sales tax collection fell to 2.4 percent, and customs duty declined to 0.7 percent.
Total expenditure declined to 12.1 percent of GDP from 14.2 percent, mainly due to lower debt servicing costs.
Defence expenditure rose to Rs. 1.69 trillion compared with Rs. 1.423 trillion last year, and subsidies increased to Rs. 632 billion from Rs. 466 billion.
The Federal Board of Revenue reported tax collections of Rs. 9.306 trillion during July–March, while provincial tax revenues grew 26 percent to Rs. 861 billion.
