Pakistan’s fiscal surplus fell by 40 per cent year on year to Rs1.273 trillion in the first quarter of the current fiscal year, as higher government spending and rising interest payments outweighed expenditure controls and subsidy cuts. The surplus was equivalent to 0.9 per cent of gross domestic product in July-September, down from 1.7 per cent a year earlier, according to fiscal operations data released by the Ministry of Finance.
Total government revenue declined to Rs6.004 trillion from Rs6.2 trillion a year earlier, despite an increase in tax collections, while total expenditure rose by 15 per cent to Rs4.730 trillion. Interest payments were the biggest source of pressure, rising by more than 23 per cent to Rs1.7 trillion during the quarter. The government collected Rs381.8 billion under the petroleum levy. The primary surplus — the difference between total revenue and expenditure excluding interest payments — narrowed to 2.1 per cent of GDP, or Rs2.974 trillion, from 2.8 per cent a year earlier.
The government still met three of the four key fiscal targets agreed with the International Monetary Fund — on the primary budget surplus, the provincial cash surplus and Federal Board of Revenue collections. The primary surplus beat the IMF’s quarterly target of Rs1.95 trillion by more than Rs1 trillion. But provincial cash grants to the Centre reached only Rs57.5 billion in the quarter, less than 6 per cent of the Rs1.035 trillion the provinces had agreed to contribute towards security expenditure and projects of national importance. Finance Minister’s adviser Khurram Shehzad said Pakistan had now recorded three consecutive first-quarter surpluses, in FY25, FY26 and FY27, after 23 consecutive years of deficits between FY02 and FY24. The IMF has projected a fiscal deficit of 3.5 per cent of GDP, excluding grants, under Pakistan’s $7 billion Extended Fund Facility programme, and its Executive Board is tentatively expected to meet next month to consider loan tranches worth $1.2 billion.
Sources: Dawn, ‘Fiscal surplus shrinks 40pc as revenues decline’, 14 November 2026 — https://www.dawn.com/news/2044374 ; Business Recorder, ‘1QFY27: Fiscal surplus plunges 40pc YoY’, 14 November 2026 — https://www.brecorder.com/news/40448853 ; Profit by Pakistan Today, ‘Pakistan’s fiscal surplus falls 40% in Q1 FY27’, 14 November 2026 — https://profit.pakistantoday.com.pk/2026/11/14/pakistans-fiscal-surplus-falls-40percent-to-rs127-trillion-in-first-quarter-of-fy27 ; ProPakistani, ‘Govt Celebrates 3rd Straight Budget Surplus Despite 40% Decline in Q1 FY27’, 13 November 2026 — https://propakistani.pk/?p=1117655
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