Pakistan records Rs 1.274 trillion fiscal surplus in first quarter of FY27  

Pakistan has recorded a fiscal surplus of Rs 1.274 trillion during the first quarter of the financial year

Islamabad: Pakistan has recorded a fiscal surplus of Rs 1.274 trillion during the first quarter of the financial year 2026 to 2027, marking the third consecutive year in which the country has reported a positive budget balance during the first three months of the financial year, following a 23 year period of first quarter fiscal deficits.

According to the fiscal performance figures for the July to September 2026 period, the country’s fiscal surplus stood at 0.9 percent of Gross Domestic Product (GDP), while the primary surplus reached Rs 2.974 trillion, equivalent to 2.1 percent of GDP.

The figures showed that the government’s first quarter fiscal performance exceeded the budget target by Rs 239 billion, or 8.7 percent, reflecting continued efforts to control expenditure and improve revenue collection.

A fiscal surplus occurs when the government collects more money than it spends during a particular period. A primary surplus means that government revenue is higher than expenditure when interest payments on debt are excluded.

The latest figures indicate that Pakistan has maintained a positive fiscal balance during the first quarter for three consecutive financial years, a notable change from the earlier pattern of first quarter budget deficits.

According to the data, Pakistan recorded a fiscal surplus of Rs 1.896 trillion during the first quarter of FY25, followed by Rs 2.119 trillion in the corresponding period of FY26.

During the first quarter of FY27, the surplus stood at Rs 1.274 trillion.

Although the latest surplus was lower than the figures recorded during the previous two financial years, it marked the continuation of the country’s positive first quarter fiscal performance.

The figures also showed that Pakistan recorded its three highest first quarter primary surpluses in nominal rupee terms during the past 26 years, with each of the three consecutive financial years reporting a primary surplus exceeding Rs 2.9 trillion.

The government also reported improvement in its annual fiscal position during the financial year 2025 to 2026.

According to the figures, Pakistan’s annual fiscal deficit declined to 2.6 percent of GDP during FY26, the lowest level recorded in 22 years.

A fiscal deficit occurs when the government spends more money than it collects through taxes and other sources of income.

The reduction in the annual fiscal deficit indicates that the gap between government revenue and total expenditure narrowed during the financial year.

The figures further showed that Pakistan achieved an annual primary surplus of 2.9 percent of GDP during FY26, the highest level recorded since at least FY01.

This was also the third consecutive financial year in which the country recorded an annual primary surplus, covering FY24, FY25 and FY26.

The continued primary surpluses indicate that government revenue has been sufficient to cover expenditure other than interest payments on debt during these periods.

Another important development was the performance of tax collections during the first quarter of FY27.

Despite tax relief measures introduced in the federal budget for FY27, tax collections during the July to September period exceeded the target set for the quarter.

The figures did not specify the total amount of tax collected or the amount by which collections exceeded the target.

The positive performance in tax collection, along with expenditure management, contributed to the government’s reported fiscal position during the quarter.

The fiscal data also highlighted the importance of maintaining financial discipline to improve Pakistan’s economic stability and ability to manage public debt.

Continued fiscal and primary surpluses can help reduce the government’s need for additional borrowing and strengthen confidence in its financial management.

The government has linked its fiscal strategy with improved international financial credibility, better debt management and sustainable economic growth.

However, the latest first quarter surplus remained below the corresponding figures for FY25 and FY26, showing that the size of the surplus has declined despite the continuation of the positive trend.