Islamabad, Feb 9: Pakistan has recorded a fiscal deficit of 1.2 percent of GDP, amounting to Rs. 1,538 billion in the first half of the fiscal year 2024-25 (1HFY25), according to the Finance Ministry. The consolidated fiscal report for the federal and provincial governments from July to December 2024 reveals that total revenue reached Rs. 9,227 billion, while total expenditures stood at Rs. 8,201 billion during this period.
Current expenditures increased by over 17 percent compared to the same period last fiscal year, reaching Rs. 7,702 billion. A significant portion of these expenditures was attributed to mark-up payments, which surged by 22 percent from Rs. 4,220 billion in 1HFY24 to Rs. 5,142 billion in 1HFY25. The second quarter of FY25 witnessed an extraordinary spike in mark-up payments, soaring by 194 percent to Rs. 3,835 billion.
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Non-tax revenue demonstrated impressive growth, rising by 82 percent year-on-year. In 1HFY25, non-tax revenue was recorded at Rs. 3,602 billion, compared to Rs. 1,979 billion in the corresponding period of FY24. This sharp increase suggests improved revenue collection efforts and other inflows outside the taxation system.
The primary balance, which reflects the government’s fiscal position excluding interest payments, showed a robust improvement. It reached Rs. 3,604 billion, equivalent to 2.9 percent of GDP in 1HFY25. This marks a 99 percent increase from the Rs. 1,812 billion recorded in 1HFY24, highlighting significant progress in fiscal consolidation.
The data underscores the government’s focus on revenue enhancement and fiscal management. However, the surge in mark-up payments remains a challenge, exerting pressure on overall expenditures. Maintaining a sustainable fiscal path will require continued efforts in revenue generation and prudent spending controls.
With a mix of improved tax collection, higher non-tax revenue, and controlled expenditures, Pakistan aims to strengthen its fiscal position in the coming months. The performance in the second half of FY25 will be crucial in determining the overall economic outlook for the year.
