Islamabad: A recent report by Topline Securities on the Pakistani economy has raised hopes for an improvement in the country’s fiscal situation. According to the report, the fiscal deficit in the fiscal year 2025 was only 5.38 percent, which is the lowest in the last 9 years. This rate is lower than the 5.6 percent estimate of the government of Pakistan and the IMF.
The report said that the tax-to-GDP ratio has reached a 7-year high of 11.3 percent, indicating sustained economic improvement. The FBR’s tax collections, including Petroleum Development Levy (PDL), reached Rs 12.9 trillion, which was Rs 4.3 trillion in the last 5 years.
The report said that government expenditure increased by 36 percent, while non-tax revenue also increased by 66 percent due to high interest rates.
During the fiscal year 2025, the primary balance was a surplus of 2.4 percent of GDP, which is the best figure in the last two decades. This surplus was better than the government’s estimate of 2.2 percent and the IMF’s estimate of 2.1 percent.
Topline Securities also says that Pakistan can maintain a primary surplus for the third consecutive year in 2026, while the overall fiscal deficit is expected to further narrow to 4-4.1 percent of GDP.
According to the report, interest payments on loans have also decreased by 9 percent, and only 76 percent of FBR revenue is now being spent on interest payments, which was 88 percent in 2024.
