Pakistan’s Fiscal Performance in the First Quarter of FY2025-26
Pakistan’s fiscal position has shown a notable improvement during the first quarter (July to September) of the current fiscal year 2025-26. The country recorded a budget surplus of Rs2.1 trillion, which is equivalent to 1.6 percent of the GDP. This positive outcome was reported by the Finance Division through a summary of consolidated federal and provincial fiscal operations for the period.
During the first quarter, total revenue reached Rs6.2 trillion, accounting for 4.8 percent of the GDP, while total expenditure stood at Rs4.1 trillion, representing 3.1 percent of the GDP. As a result, the national budget showed a surplus of Rs1.2 trillion, or 1.6 percent of the GDP. Additionally, the primary balance posted a surplus of Rs3.5 trillion, which is 2.7 percent of the GDP.
Revenue Breakdown
The total revenue of Rs6.1 trillion included tax collection by the Federal Board of Revenue (FBR) amounting to Rs2.88 trillion and non-tax collections totaling Rs3.046 trillion. The federal non-tax revenue comprised several components:
- Mark-up from Public Sector Enterprises (PSEs) and others: Rs13.3 billion
- Dividends: Rs26.6 billion
- Profit from PTA and others: Rs17.3 billion
- Surplus profit from the State Bank of Pakistan: Rs2.4 trillion
- Defence receipts: Rs6.5 billion
- Passport fees: Rs14.1 billion
- Discount retained on crude oil: Rs4.7 billion
- Royalties on oil and gas: Rs22.8 billion
- Windfall levy against crude oil: Rs9.2 billion
- Petroleum levy on LPG: Rs818 million
- Gas infrastructure development Cess: Rs603 million
- Natural gas development surcharge: Rs7.9 billion
- Petroleum levy: Rs371.6 billion
- Other sources: Rs46.5 billion
Expenditure Overview
The current expenditure of Rs4.047 trillion included total interest payments of Rs1.38 trillion. The breakdown of interest payments was as follows:
- Domestic markup: Rs1.18 trillion
- Foreign markup: Rs201.2 billion
Other major expenditures included:
- Pension: Rs672.557 billion
- Running of civil government: Rs558.767 billion
- Defence: Rs447.5 billion
- Pensions: Rs249.4 billion
- Subsidies: Rs119.6 billion
- Grants to others: Rs319 billion
Provincial Budget Surpluses
The four provincial governments collectively achieved a budget surplus of Rs781 billion during the first quarter of FY26. Their total expenditures were recorded at Rs1.44 trillion, while their revenues reached Rs2.22 trillion.
Punjab
Punjab province recorded a budget surplus of Rs441 billion. Its expenditures were registered at Rs579.8 billion, compared to revenues of Rs1.021 trillion. The Punjab government received Rs882.3 trillion from the federal government. However, the province generated only Rs109.1 billion from its own sources, with non-tax collections amounting to Rs35.4 billion.
Sindh
Sindh’s budget showed a surplus of Rs208.8 billion. Its expenditures were recorded at Rs466.4 billion, compared to revenues of Rs675.2 billion. The Sindh government received Rs441.6 billion from the federal government. It collected Rs135.5 billion in taxes and Rs7.9 billion in non-tax collections.
Khyber Pakhtunkhwa (KP)
KP’s budget was in surplus by Rs77.2 billion. The province’s expenditures were recorded at Rs271 billion, compared to revenues of Rs348.2 billion. KP’s tax collection amounted to Rs15.88 billion, and non-tax collections stood at Rs14.2 billion. The province received Rs287.1 billion from the federal government under the National Finance Commission (NFC).
Balochistan
Balochistan also recorded a budget surplus of Rs53.5 billion. Its expenditures remained at Rs124.8 billion, compared to revenues of Rs178.3 billion. Tax collections totaled Rs8.5 billion, while non-tax collections reached Rs4.3 billion. The province received Rs164.3 billion from the federal government under NFC.