The period from July to November 2024 saw a significant boost in Pakistan’s fiscal performance, with the Federal Board of Revenue (FBR) recording a 23.3% growth in tax collections, which reached Rs 4,295 billion, compared to Rs 3,485 billion during the same period last year. This impressive growth was driven by strong performances across key tax categories. Direct taxes grew by 27.0%, sales taxes rose by 23.6%, federal excise duty (FED) increased by 25.1%, and customs duties saw a more modest growth of 8.0%.
The Federal Fiscal Operations report for July to October 2024 highlighted a 71.8% increase in net federal revenues, which surged to Rs 4,822 billion. This surge was primarily fueled by a remarkable 101.2% increase in non-tax collections, which reached Rs 3,192 billion. Tax collections also saw a rise, reaching Rs 3,443 billion, up from Rs 2,748 billion last year. This robust growth in both tax and non-tax revenue was a key factor in strengthening fiscal consolidation, as it helped reduce the fiscal deficit and maintain a positive balance.
A key aspect of this fiscal consolidation has been the prudent management of public expenditure. The government’s careful expenditure control measures helped contain the growth in expenditures to 20.6%, significantly lower than the growth in revenues. Total federal expenditures amounted to Rs 4,472 billion, up from Rs 3,707 billion last year. This careful management of spending has been crucial in ensuring that the government remains on track with its fiscal consolidation goals, despite the challenges posed by global and domestic economic conditions.
As a result of these positive fiscal developments, the overall fiscal balance recorded a surplus of Rs 495 billion, or 0.4% of GDP, compared to a deficit of Rs 862 billion, or -0.8% of GDP, in the same period last year. This marks a significant improvement in Pakistan’s fiscal position, demonstrating the effectiveness of both the revenue generation strategies and expenditure management policies implemented by the government.
Furthermore, the primary surplus also saw a substantial increase, reaching Rs 3,124 billion, or 3.0% of GDP, up from Rs 1,430 billion, or 1.4% of GDP, in the previous year. The primary surplus is a key indicator of the government’s ability to meet its fiscal obligations without relying on borrowing, and this growth signifies a strong improvement in fiscal discipline and sustainability.
Overall, these fiscal outcomes reflect a positive trajectory for Pakistan’s economy, with stronger fiscal consolidation, improved revenue collection, and controlled expenditure growth. Going forward, maintaining these efforts will be critical to ensuring continued economic stability and creating the fiscal space needed to address broader development challenges. The government’s ability to sustain this performance will be closely monitored, as it plays a pivotal role in ensuring macroeconomic stability and meeting the fiscal targets set out in the country’s economic policies.