Govt posts a rare budget surplus of Rs1.7tn in Q1FY25

The government has closed the first quarter of the current fiscal year (July-Sept 2024-25) with a budget surplus of 1.4% of the GDP or Rs1,696.01 billion, according to the Finance Ministry.

According to consolidated data of fiscal operation uploaded by the Finance Ministry on Thursday, for the first quarter of the current fiscal year showed a total expenditure of Rs4.131 trillion against the total revenue of Rs5.827 trillion.

“Pakistan recorded a budget surplus in 1QFY25, the first since 2QFY04,” said Arif Habib Limited (AHL), a brokerage house. “The primary driver of this surplus was the substantial profit contribution from the State Bank of Pakistan (SBP), amounting to Rs2.5 trillion,” said AHL.

Moreover, the government recorded a primary surplus of Rs3.002 trillion in 1QFY25, reflecting a primary balance surplus of 2.4% of the GDP.

This is “the largest primary surplus recorded to date,” said AHL.

According to fiscal operation data, tax revenue was recorded at Rs2.775 trillion with the federal tax collection clocked in at Rs2.562 trillion and provincial tax collection of Rs212.97 billion.

Govt closes Q1 with budget deficit of 0.9pc of GDP

During the quarter, the government collected Rs3.051 trillion in non-tax collection, registering a massive growth of 551% compared to Rs469 billion collected in the same quarter last fiscal.

Meanwhile, the government’s total expenditure stood at Rs4.131 trillion.

The current expenditure stood at Rs3.537 trillion which included mark-up payments Rs1.306 trillion and defence expenditure Rs410.175 billion.

Development expenditure and net lending stood at Rs276.723 billion, while statistical discrepancy was at Rs317.24 billion.

“Markup payments in 1QFY25 saw a 5% YoY decline, largely due to a 13% reduction in domestic markup servicing, attributed to declining interest rates,” said AHL.

Among provinces, only Punjab recorded a budget deficit of Rs160.16 billion.

Whereas Sindh saw a budget surplus of Rs131.09 billion, Khyber Pakhtunkhwa registered a budget surplus of Rs103.75 billion, and Balochistan created a provincial surplus of Rs85 billion.