The federal government managed to bring down Pakistan’s fiscal deficit to Rs7,090 billion — or 5.4% of GDP — in the last fiscal year, largely by aligning with most of the conditions set by the International Monetary Fund (IMF).
According to figures released by the Ministry of Finance on Wednesday, the government’s total income, spending, and budgetary goals achieved between July 2023 and June 2024.
Govt income nears Rs10 trillion
The federal government’s net income stood at Rs9,946 billion, while total expenditure surged to Rs17,036 billion, according to the Ministry of Finance document.
Read also: Govt’s non-tax revenue surges by Rs1,998bn
Despite higher earnings, ballooning costs — primarily due to interest payments and subsidies — kept the fiscal deficit in focus.
A major chunk of the income, Rs6,854 billion, was transferred to provinces under the divisible pool, highlighting the federal government’s limited fiscal space.
Interest payments and defense top spending
Out of the Rs17 trillion in expenditure:
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Rs8,847 billion went toward interest payments on domestic and external loans, making it the largest single expenditure.
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Rs2,193 billion was allocated for defense.
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Rs1,049 billion was spent on federal development projects, reflecting a 43% increase over the previous year.
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Rs1,297 billion went to subsidies, while Rs910 billion covered pensions.
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Rs891 billion was used for running the civil government.
The Ministry reported a primary budget surplus — which excludes interest payments — of over Rs2.7 trillion, exceeding the IMF-agreed target of Rs2.4 trillion.
Tax collection misses target despite trader scheme
While the Federal Board of Revenue (FBR) collected Rs11,744 billion, it fell short by Rs1,226 billion from its annual target of Rs12,970 billion.
The much-touted Trader-Friendly Scheme also failed to hit its target, bringing in just Rs50 billion.
Provincial savings and surpluses
Despite shortfalls, all four provinces posted budget surpluses, though slightly below targets:
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Punjab led with a Rs348 billion surplus
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Sindh saved Rs283 billion
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Khyber Pakhtunkhwa managed Rs176 billion
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Balochistan recorded Rs114 billion
In total, the provinces saved Rs921 billion—less than the target of Rs1,200 billion.
