Fiscal indicators show improvement in FY25: Economic Survey

June 09, 2025 (MLN): Pakistan’s fiscal consolidation efforts remained on track in FY2025 for a second consecutive year, reinforcing fiscal discipline and reflecting notable improvement in major fiscal indicators, as outlined in the Pakistan Economic Survey 2024–25.

The fiscal deficit narrowed to 2.6% of GDP during July–March FY2025, down from 3.7% in the same period last year.

The primary surplus improved significantly to Rs3.4 trillion (3.0% of GDP) from Rs1.6tr (1.5% of GDP) last year.

The revenue deficit also improved to 1.1% of GDP from 2.4%.

Total revenue grew by 36.7%, reaching Rs13.3tr, with tax revenues increasing by 25.8% to Rs9.1tr and non-tax revenues rising by 68.0% to Rs4.23tr.

Federal tax collection rose by 25.9%, while provincial tax collection increased by 24.2%.

On the expenditure side, total expenditure rose by 19.4% to Rs16.34tr.

Current expenditure increased by 18.3% to Rs14.5tr.

Within this, markup payments grew by 16.7% to Rs6.4tr, while defence spending increased by 16.5% to Rs1.4tr.

Development expenditure and net lending saw a growth of 35.0%, reaching Rs1.5tr.

The federal PSDP, including development grants to provinces, rose by 32.6%.

The provinces significantly supported fiscal consolidation, posting a cumulative surplus of Rs1.05tr during July–March FY2025 compared to Rs435.4 billion in the previous year.

Provincial revenues increased by 33.2% to Rs6.39tr, while expenditures grew by 22.3% to Rs5.34tr.

Provincial own source revenues grew by 25%, with tax and non-tax revenues increasing by 24.2% and 27.8%, respectively.

The current fiscal performance, amid a challenging economic environment, indicates effective fiscal management.

The government is continuing comprehensive fiscal reforms in coordination with provinces to enhance revenue mobilization, improve expenditure efficiency, and ensure long-term fiscal sustainability.

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