Pakistan’s fiscal landscape continued to show signs of improvement in the opening months of FY2026, as sustained consolidation measures and more efficient revenue administration contributed to both a federal fiscal surplus and a stronger primary balance. The latest data underscores the government’s ongoing commitment to stabilising public finances, even as expenditure needs and economic pressures evolve.
During the July to September FY2026 period, net federal revenues grew by 2.4 percent, rising to Rs. 4,117.5 billion compared to Rs. 4,019.5 billion recorded in the same period last year. This growth, though moderate, reflects steady improvement in revenue mobilisation and greater administrative discipline across tax and non-tax channels. Strengthened monitoring systems, better documentation practices and targeted enforcement approaches continue to play a role in supporting revenue flows.
Further momentum was observed in federal tax performance. From July to October FY2026, the Federal Board of Revenue (FBR) reported collection of Rs. 3,834.9 billion, marking an 11.4 percent increase over the previous year’s corresponding period. This upward trend points to broadening compliance, enhanced digital facilitation tools, and more effective collection practices across customs, sales tax, income tax and excise duties. The rise in tax receipts remains central to Pakistan’s fiscal framework, supporting budget sustainability while reducing reliance on external financing.
On the expenditure front, government outlays also expanded during the period. Total spending increased by 11.9 percent during July to September FY2026, reaching Rs. 2,779.3 billion. The increase reflects policy-driven allocations for public services, development projects, subsidies and operational requirements across ministries and departments. Despite this rise, the relative strength of revenue collection helped maintain a positive fiscal trajectory.
As a result of the combined revenue and expenditure movements, the federal fiscal balance recorded a surplus for the second consecutive time, amounting to Rs. 1,338.2 billion. While slightly lower than the Rs. 1,536.3 billion surplus achieved in the same period last year, the outcome remains significant in demonstrating ongoing fiscal restraint amid broader economic adjustments.
Pakistan’s primary balance, which measures the fiscal position excluding interest payments, also improved markedly. The primary surplus reached Rs. 3,497.3 billion, up from Rs. 3,202.4 billion recorded during the corresponding period of the previous fiscal year. This increase highlights the impact of continued fiscal controls and the role of revenue strengthening in creating space for essential government spending without expanding the debt burden.
The combined surpluses reflect the broader policy direction aimed at improving debt sustainability, strengthening budget credibility and creating a more predictable fiscal environment. As the government balances revenue gains with growing public expenditure needs, maintaining consistent consolidation efforts will remain crucial for long-term stability, investor confidence and macroeconomic resilience.
With fiscal indicators showing positive early-cycle performance, policymakers now face the challenge of sustaining momentum in the months ahead. Continued revenue growth, careful expenditure management and enhanced administrative efficiency will remain key pillars in reinforcing Pakistan’s financial outlook for FY2026 and beyond.
Follow the PakBanker Whatsapp Channel for updates across Pakistan’s banking ecosystem.