ISLAMABAD: Pakistan’s fiscal surplus plunged 40 percent year-on-year to Rs1.273.7 trillion, or 0.9 percent of GDP, in the first quarter of fiscal year 2026-27, against the comparable period the year before.
The International Monetary Fund has projected negative 3.5 percent (excluding grants) under the ongoing USD 7 billion Extended Fund Facility programme.
The plunge in fiscal surplus is in spite of 381.8 billion rupees collected under petroleum levy, while total government expenditure increased by 15 percent reaching Rs4.730 trillion, including Rs1.700 trillion in interest payments.
This data was shared by the Finance Division in its first quarter summary of consolidated federal and provincial fiscal operations 2026-27, which noted that government recorded a primary surplus of Rs2.973.5 trillion, equivalent to 2.1 percent of GDP, during the quarter, while consolidated revenues amounted to Rs6.004 trillion against total expenditure of Rs4.730 trillion.
The revenue performance remained heavily dependent on non-tax receipts, which stood at Rs2.617 trillion, accounting for around 44 percent of total revenue. Tax collection amounted to Rs3.387 trillion, including Rs3.086 trillion collected by the Federal Board of Revenue (FBR) and Rs301 billion by provincial governments.
The federal government’s non-tax revenue reached Rs2.531 trillion, with two major contributors - Rs1.933 trillion in State Bank of Pakistan (SBP)’ profits and Rs382 billion in petroleum levy collections.
In addition, Rs25 billion was under mark-up receipts from public sector enterprises and others, Rs5.918 billion received from defence receipts, Rs11.203 billion from passport fee, Rs5.219 billion from discount retained on Crude Oil, Rs38.954 billion from royalties on oil\ gas, Rs7.884 billion from windfall levy against crude oil, Rs16.370 billion from natural gas development surcharge, Rs22.257 billion from carbon levy, Rs9.302 billion from NEV Adoption Levy and Rs40 billion others.
On the expenditure side, mark-up payments on public debt remained the single largest burden, reaching Rs1.699 trillion, including Rs1.493 trillion on domestic debt and Rs207 billion on foreign debt.
Defence expenditure stood at Rs495.4 billion, while pension payments amounted to Rs264 billion. Federal spending on running civil government was recorded at Rs206.6 billion, subsidies at Rs84.6 billion and grants to others Rs281.014 billion.
Consolidated current expenditure stood at Rs4.293 trillion, while development expenditure and net lending amounted to Rs474.9 billion. Of the total development spending, Rs467.7 billion was recorded under the Public Sector Development Programme (PSDP), including Rs392.4 billion spent by provinces and Rs75.3 billion by the federal government.
The federal government collected Rs3.086 trillion in FBR taxes during the first quarter, an increase of Rs202 billion, or 7 percent, compared with the corresponding period of last fiscal year.
Direct tax collection stood at Rs1.440 trillion, while indirect taxes amounted to Rs1.646 trillion. Sales tax contributed Rs1.137 trillion, customs duties Rs312.2 billion and federal excise duty Rs197.3 billion.
Provincial tax revenues increased by 12 percent to Rs301 billion, up Rs32 billion from the corresponding quarter of last year. Provincial non-tax revenue rose 39 percent to Rs86 billion, an increase of Rs24 billion.
Provincial governments collectively recorded a surplus of Rs599.8 billion during the quarter, with total revenue of Rs2.397 trillion against expenditure of Rs1.797 trillion.
Punjab posted the largest provincial surplus of Rs333.3 billion, followed by Sindh with Rs180.6 billion and Khyber Pakhtunkhwa with Rs102.1 billion. Balochistan, however, recorded a deficit of Rs16.2 billion.
Provincial current expenditure stood at Rs1.344 trillion, while development expenditure amounted to Rs392.4 billion.
The Finance Division revealed provincial current expenditure at Rs111 billion lower than the corresponding period of last year, despite payments being made in accordance with commitments. It added that provincial development spending remained within the allocated budgetary resources.
On the financing side, the government recorded net external financing of Rs608.9 billion, gross external inflows of Rs1.247 trillion and external debt repayments of Rs638 billion.
Copyright Business Recorder, 2026