The Government of Pakistan mentioned in the economic survey, in FY2025 the key fiscal indicators shows continued improvement, building on the consolidation achieved in the last year. The fiscal deficit narrowed further to 5.4 percent of GDP in FY2025, as against to 6.8 percent in FY2024, reflecting sustained fiscal consolidation efforts. Similarly, the primary balance improved significantly, registering a surplus of 2.4 percent of GDP in FY2025, up from 0.9 percent in FY2024, showing strengthened fiscal discipline and enhanced capacity to manage debt obligations. The revenue deficit also fell to 3.1 percent of GDP in FY2025, as against to 5.0 percent in FY2024, reflecting stronger revenue growth relative to current expenditures. Overall, these trends highlight the impact of prudent fiscal management, enhanced revenue mobilization, and expenditure rationalization in strengthening fiscal outcomes. Statistics showed that total expenditure as a percentage of GDP increased stood at 21.2 percent in FY2025 against 19.4 percent in FY2024. This suggests that while growth in some expenditure components was contained, overall spending remained elevated because of debt servicing, development requirements, and other essential expenditure needs. Furthermore, within total expenditure, growth in current expenditure moderated to 15.9 percent in FY2025 from a higher level of 28.5 percent in FY2024. This moderation was largely driven by a sharp deceleration in markup payment expenditure, which slowed to 8.9 percent in FY 2025 from an elevated 43.3 percent in FY 2024, showing a relative easing of debt-servicing pressures.
| Trends in Components of Expenditure (% of GDP) | ||||||
|---|---|---|---|---|---|---|
| Year | Total Expenditure |
Current Expenditure |
Markup Payments |
Defence | Development Expenditure* |
Non-Interest Non-Defence Exp |
| FY 2017 | 19.1 | 14.6 | 3.8 | 2.5 | 4.8 | 12.8 |
| FY 2018 | 19.1 | 14.9 | 3.8 | 2.6 | 4.0 | 12.7 |
| FY 2019 | 19.1 | 16.2 | 4.8 | 2.6 | 2.7 | 11.7 |
| FY 2020 | 20.3 | 17.9 | 5.5 | 2.6 | 2.4 | 12.2 |
| FY 2021 | 18.5 | 16.3 | 4.9 | 2.4 | 2.2 | 11.2 |
| FY 2022 | 19.9 | 17.3 | 4.8 | 2.1 | 2.4 | 13.1 |
| FY 2023 | 19.3 | 17.3 | 6.8 | 1.9 | 2.3 | 10.6 |
| FY 2024 | 19.4 | 17.6 | 7.7 | 1.8 | 1.9 | 9.9 |
| FY 2025 | 21.2 | 18.9 | 7.8 | 1.9 | 2.6 | 11.5 |
| FY 2026 (B.E) | 19.8 | 17.5 | 6.3 | 2.0 | 2.3 | 11.5 |
| * Excluding net lending | ||||||
In contrast, non-markup current expenditure grew further to 21.4 percent in FY2025, as against with 19.0 percent in FY2024, reflecting higher requirements under subsidies, grants, pensions, defence-related spending, and running of civil government. This shows that while markup pressures eased in FY2025, noninterest spending remained a main contributor to current expenditure growth. Nevertheless, improved revenue performance and moderation in markup payments helped strengthen the fiscal position, contributing to further improvement in the primary surplus during FY 2025. Development expenditure grew sharply by 47.2 percent in FY2025, as against with 7.1 percent in FY2024, showing a notable recovery in development spending. Total revenue grew by 15.8 percent of GDP in FY2025, compared with 12.6 percent of GDP in FY2024. Tax revenue rose to 11.2 percent of GDP from 9.6 percent of GDP, while non-tax revenue rose to 4.6 percent of GDP from 3.0 percent of GDP, showing improved domestic resource mobilization. Non-tax revenue remained a main contributor to overall revenue growth in FY 2025, increasing by 65.7 percent. This performance was mainly driven by substantially higher receipts from SBP profits (169.5 percent), followed by dividend income (110.6 percent), and petroleum levy, by 79.6 percent in FY2024 and 67.6 percent in FY2025, remaining the dominant contributor, while provincial non-tax revenues also registered steady growth of 34.5 percent and 40.5 percent, respectively. Provinces also contributed significantly to improving overall fiscal performance during FY2024 and FY2025. All four provinces posted a cumulative surplus of Rs 518.2 billion in FY 2024, which increased substantially to Rs 921.5 billion in FY 2025, thereby supporting the consolidated fiscal position.