Pakistan’s fiscal deficit falls to 6.8% of GDP in FY24

In the fiscal year 2023-2024, Pakistan’s fiscal deficit decreased to 6.8 per cent of GDP, down from 7.7 per cent the previous year, according to data from the Finance Ministry.

In nominal terms, however, the fiscal deficit expanded to Rs7.21 trillion, up from Rs6.52 trillion the year before. Despite this, the country achieved a primary surplus of Rs952.92 billion, equivalent to 0.9 per cent of GDP, in contrast to a primary deficit of Rs825.53 billion, or 1.0 per cent of GDP, in FY23.

To address the fiscal deficit, the government secured Rs6.89 trillion through domestic borrowing and an additional Rs320.7 billion through external loans. This compares to the previous year when the entire deficit was covered by Rs7.2 trillion in domestic borrowing, and Rs679.85 billion in external loans were repaid.

On the revenue side, the government collected Rs13.27 trillion (12.5 per cent of GDP) in FY24, up from Rs9.63 trillion (11.4 per cent of GDP) in FY23. Tax revenue constituted approximately Rs10.1 trillion (9.5 per cent of total revenue), while non-tax revenue amounted to Rs3.18 trillion.

Government expenditure totalled Rs20.48 trillion (19.3 per cent of GDP) in FY24, an increase from Rs16.15 trillion (19.1 per cent of GDP) the previous year.

Nearly 90.7 per cent of this expenditure, or Rs18.57 trillion, was allocated to current expenditures, which included mark-up payments (Rs8.16 trillion), defence (Rs1.86 trillion), and pensions (Rs807.8 billion).