Pakistan’s fiscal balance remained in surplus during the first four months of FY2026, reflecting improved fiscal management and disciplined control over government spending. According to the latest economic data, prudent measures adopted by the government have resulted in a consolidated fiscal surplus of 1.0 percent of GDP during the July to October period of FY2026, compared to a surplus of 0.4 percent recorded during the same period last year.
The improvement in the fiscal position was supported by a 7.7 percent increase in gross federal receipts, alongside a 4.8 percent decline in total expenditure. The combination of higher revenues and restrained spending highlights the government’s focus on fiscal consolidation amid broader efforts to stabilize the economy and strengthen macroeconomic fundamentals.
In addition to the overall fiscal surplus, a primary surplus of 2.7 percent of GDP was recorded during Jul-Oct FY2026, matching the level achieved in the corresponding period of the previous year. The primary surplus, which excludes interest payments, indicates continued improvement in the government’s underlying fiscal position and its ability to manage non-interest expenditures effectively.
Revenue performance remained strong during the period, led by higher tax collection. During July to November FY2026, the Federal Board of Revenue (FBR) collected Rs. 4,734 billion, reflecting a growth of 10.2 percent compared to the same period last year. The increase underscores improved tax administration, better compliance, and recovery in economic activity.
Direct tax collection grew by 10.5 percent during Jul-Nov FY2026, supported by higher income and corporate tax receipts. Indirect taxes also showed notable growth, with sales tax collection rising by 8.5 percent. Federal excise duty registered a strong increase of 18.2 percent, while customs duty collection expanded by 10.1 percent, reflecting higher import volumes and improved enforcement.
Analysts note that the sustained fiscal surplus provides the government with greater flexibility to manage debt obligations and support priority development spending without exacerbating fiscal pressures. At the same time, maintaining spending discipline remains critical to ensuring that fiscal gains are sustained over the remainder of the fiscal year.
Overall, the improved fiscal balance during the first months of FY2026 signals progress toward greater fiscal stability. Continued growth in revenues, combined with prudent expenditure management, is expected to support macroeconomic stability and strengthen investor confidence in Pakistan’s economic outlook.
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