In fiscal year 2024-25, Pakistan recorded its lowest budget deficit in nearly a decade at 5.38% of GDP, equal to around Rs 6.17 trillion. This beat both government and IMF projections due to strong revenue growth, with tax and non-tax revenues rising by 36% year-on-year while expenditures increased by only 18%.
Tax revenue jumped 26%, supported by record Federal Board of Revenue collections, while non-tax income surged 66%, largely from a Rs 2.62 trillion dividend from the State Bank of Pakistan. The tax-to-GDP ratio reached 11.3%, a seven-year high. Pakistan also posted a primary surplus of 2.4% of GDP, the highest in more than 20 years.
This fiscal performance boosted investor confidence, helping the Pakistan Stock Exchange hit record highs as both foreign and local inflows grew.
budget deficit FY25, Pakistan fiscal discipline, revenue growth
