KARACHI, October 31 2024: In a historic turn of events, Pakistan has reported a budget surplus for the first time since the second quarter of FY04, marking a significant milestone in the country’s fiscal management.
Key Highlights of 1QFY25:
- Budget Surplus:
- The country achieved a remarkable budget surplus of PKR 1.7 trillion, a drastic improvement from a deficit of PKR 980 billion in 1QFY24 and PKR 3.3 trillion in 4QFY24.
- Driving Factors:
- A standout profit of PKR 2.5 trillion from the State Bank of Pakistan (SBP) played a pivotal role in achieving this surplus.
- The primary surplus reached an unprecedented PKR 3 trillion, the highest ever recorded in Pakistan’s history.
- Revenue Growth:
- Total revenue receipts surged to PKR 5.8 trillion, reflecting an impressive 117% year-on-year increase from PKR 2.7 trillion, and a 67% rise from PKR 3.5 trillion in the previous quarter.
- This revenue constituted 4.7% of GDP, up from 2.5% in 1QFY24.
- Tax and Non-Tax Revenue:
- FBR tax collections amounted to PKR 2.6 trillion, a 26% year-on-year increase.
- Non-tax revenue skyrocketed to PKR 3 trillion, a staggering 551% increase year-on-year, primarily driven by the SBP’s substantial profit.
- Expenditure Trends:
- Total expenditure stood at PKR 4.1 trillion, a 13% increase from the previous year but a notable 39% decline from the previous quarter.
- Current expenditure rose to PKR 3.5 trillion (2.8% of GDP), an 11% year-on-year increase but down 43% quarter-on-quarter.
- Debt Servicing:
- Mark-up payments decreased by 5% year-on-year to PKR 1.3 trillion, highlighting the easing burden of debt servicing, primarily due to declining interest rates.
- Public Sector Development Program (PSDP):
- Total PSDP allocations fell to PKR 278 billion, a 3% year-on-year decline and a staggering 68% decline from the previous quarter.
Overall, these figures reflect a significant shift in Pakistan’s economic landscape, showcasing improved fiscal discipline and a path towards sustainable economic growth. The government’s ability to achieve a budget surplus signals a positive outlook for the country’s financial health and provides new opportunities for investment and development in the upcoming quarters.
