ISLAMABAD: With the collection of petroleum and climate levy exceeding Rs1.478 trillion, the government has been able to restrict its federal budget deficit to Rs3.34 trillion, equivalent to 2.6 percent of Gross Domestic Product (GDP), in the first 11 months (July-May) of FY 2025-26.
In the wake of a revenue surplus of Rs1.31 trillion generated by the provinces in the first 11 months of FY 2025-26 — in line with the IMF agreement — the overall fiscal deficit was curtailed to Rs2.03 trillion, or 1.6 percent of GDP, during this period.
For the whole fiscal year, the government had envisaged keeping the overall deficit at 3 percent of GDP (Rs3.77 trillion) in accordance with the revised estimates for the last fiscal year, against the initially envisaged target of 3.9 percent of GDP (an absolute figure of Rs5.03 trillion).
The Ministry of Finance has not yet released the reconciled figures of fiscal operations for the whole fiscal year 2025-26, which ended on June 30, 2026, as the final figures will be worked out in the coming weeks.
However, official data for the first 11 months of FY 2025-26 showed that three heads of non-tax revenue — including State Bank of Pakistan (SBP) profits, petroleum levy and climate support levy — helped the government fetch Rs4.82 trillion in the first 11 months, against the overall target of Rs5.14 trillion for the whole fiscal year. The SBP’s surplus profit stood at Rs2.428 trillion, the petroleum levy at Rs1.432 trillion and the climate levy at Rs45.968 billion in the first 11 months of the last fiscal year.
The FBR’s collection stood at Rs11.228 trillion in the July-May period of FY 2025-26, so gross federal revenue receipts stood at Rs16.08 trillion. After transferring Rs6.6 trillion to provinces through the NFC Award, grants and subventions, net federal revenue receipts were left at Rs9.38 trillion in the first 11 months of the last financial year.
Total expenditures were booked at Rs12.73 trillion in the first 11 months of the last fiscal year, out of which current expenditures consumed the major chunk of Rs12.15 trillion. Among current expenditures of Rs12.15 trillion, the largest head was mark-up payment on domestic and foreign loans, which consumed Rs6.163 trillion alone — indicating that more than 50 percent of current expenditure was consumed by this single largest item. The remaining major expenditure heads included defence and others, with defence spending standing at Rs2.11 trillion, and all other heads — including pay, pensions, subsidies, running of civil administration, and others — consuming Rs3.879 trillion in the first 11 months of FY 2025-26. Public Sector Development Programme (PSDP) spending stood at Rs578 billion in the first 11 months of the current fiscal year. However, Minister for Planning Ahsan Iqbal told this correspondent that it was the second consecutive year when the Ministry of Planning was able to utilise 100 percent of allocated funds for the PSDP in the last fiscal year ended on June 30, 2026.
The Ministry of Finance is all set to release the reconciled figures of fiscal operations for the whole fiscal year 2025-26 in the coming weeks, to keep the overall fiscal deficit at 3 percent of GDP for 2025-26, which stood at 1.6 percent of GDP in the July-May period of FY26.
The statistical discrepancy — which means the inability to reconcile between revenues and expenditures — stood at Rs262.394 billion in the first 11 months of the last fiscal year.
