Fiscal operations in first quarter: Whopping Rs2.5tr SBP profit helps Pakistan achieve first surplus in nearly 20 years

ISLAMABAD: The yearly profit of Rs2,500 billion from the State Bank of Pakistan (SBP) has been adjusted in the first quarter (July-Sept) period, resulting in turning Pakistan’s budget from deficit to surplus during the current fiscal year.

This posting of surplus budget in Pakistan in any quarter occurred 20 years ago, and now it happened mainly because the SBP profits budgeted for the whole financial year were received in the first quarter of 2024-25. The overall budget surplus in the first quarter stood at Rs1.69 trillion, while the primary surplus was posted at Rs3 trillion.

Out of the total gross revenue receipts of Rs5.5 trillion, the Centre transferred Rs1.56 trillion to the provinces under the NFC Award. The provinces generated a surplus of Rs160 billion in the first quarter which was low than sought under the IMF agreement for the first quarter of the current fiscal year.

According to the fiscal operation released by the Ministry of Finance, the SBP profit was adjusted in the first quarter of FY2025, the fiscal deficit clocked at 0.65 percent of GDP while primary surplus at 0.4 percent of GDP. It can be compared to fiscal deficit of 0.9 percent of GDP and primary surplus of 0.4 percent of GDP in the same first quarter of FY24.

The fiscal operation showed that the total revenues stood at Rs5.28 trillion out of which the FBR fetched Rs2.56 trillion and the provinces Rs210 billion. The non-tax revenue witnessed a phenomenal growth as it stood at Rs3.05 trillion in the first quarter of the current fiscal year against the total budgetary estimates of Rs3.5 trillion for the whole financial year.

Total booked expenditure stood at Rs4.13 trillion out of which the major expenditure head was related to current spending to the tune of Rs3.53 trillion. Ironically, the statistical discrepancy again surfaced and stood at Rs310 billion in the first quarter of FY25.

The debt servicing remained the largest ticket item on the expenditure front and consumed Rs1.3 trillion, followed by defence Rs410 billion. The development budget became the lowest priority as the utilisation of Public Sector Development Program (PSDP) at the federal level stood at meager amount of just Rs220 billion in the first quarter of FY25. In non-tax revenue front, the government fetched Rs260 billion as petroleum levy in the first quarter of the current fiscal year.