Islamabad: Pakistan has recorded its first quarterly budget surplus in 20 years, with a total of PkR1.7 trillion during the first quarter of fiscal year 2025. This marks a significant financial milestone, contrasting sharply with a deficit of PkR980 billion in the same period last year.

According to AKD Securities Limited, the remarkable surplus is attributed to a 117% year-over-year increase in total revenues, driven by a 25% rise in tax revenues and an unprecedented 551% surge in non-tax revenues. This increase in non-tax revenues was significantly boosted by a PkR2.5 trillion surplus profit from the State Bank of Pakistan (SBP) during the period.

While total expenditures also rose by 13% year-over-year, the impact was mitigated by a 5% decrease in markup payments, thanks to falling interest rates and reduced maturities. Despite higher debt levels, which reached PkR70.3 trillion in August 2024, up by 10% from the previous year, the country managed to not only meet but significantly surpass the International Monetary Fund’s (IMF) fiscal targets for the year. For FY25, the IMF had set an annual target for a fiscal deficit of PkR8.6 trillion and a primary surplus of PkR1.2 trillion, yet the first quarter alone saw a budget and primary balance surplus of PkR1.7 trillion and PkR3.0 trillion, respectively.

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