Pakistan’s fiscal performance remained on track during the first half of FY2026, supported by higher revenues and a significant reduction in mark-up payments. The government recorded a fiscal surplus during Jul–Nov FY2026, reflecting improved fiscal discipline and better management of public finances.
Gross federal revenue receipts increased by 7.8 percent during the period under review. This growth was driven by an increase in both tax and non-tax revenues, with Federal Board of Revenue (FBR) tax collections rising by 10.2 percent, while non-tax revenues posted a growth of 4.8 percent.
On the expenditure side, total government spending declined by 6.2 percent compared to the same period last year. This reduction was mainly due to a 6.4 percent fall in current expenditure, largely attributed to a sharp decline of 21.3 percent in mark-up payments. The easing of debt servicing costs played a key role in improving the overall fiscal balance.
In contrast, development expenditure increased by 1.5 percent, indicating continued government focus on development activities despite overall expenditure rationalization.
As a result of these trends, the government achieved a consolidated fiscal surplus of 0.8 percent of GDP during Jul–Nov FY2026, compared to a marginal deficit of 0.04 percent recorded during the same period last year. Similarly, a primary surplus of 2.8 percent of GDP was recorded, broadly in line with the 2.9 percent surplus achieved in the corresponding period of the previous fiscal year.
Revenue performance remained strong beyond November as well. During Jul–Dec FY2026, FBR tax revenue increased by 9.5 percent to reach Rs6,161 billion. This growth was broad-based, supported by an 8.9 percent increase in direct taxes, a 10 percent rise in sales tax collection, a 15.6 percent increase in federal excise duty, and a 7.4 percent growth in customs duty.
Overall, the fiscal outturns for the first half of FY2026 indicate sustained progress toward fiscal consolidation, supported by revenue growth, controlled expenditures, and improved debt servicing dynamics.
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