Rising interest payments, uplift spending strained Pakistan's fiscal position in FY27's 1st quarter: ministry
ISLAMABAD: Despite a massive 90 per cent cut in subsidies and higher-than-targeted revenue collection, Pakistan’s fiscal and current account buffers weakened in the first quarter of the current fiscal year (FY27) owing to an almost 37pc increase in interest payments coupled with greater development spending. The “overall fiscal surplus narrowed to 0.8pc of GDP (Rs1.198 trillion), compared with…
Islamabad, Pakistan experienced a weakening fiscal position in the first quarter of fiscal year 27 (FY27) due to a 37% rise in interest payments and increased development spending, despite a 90% cut in subsidies and higher-than-targeted revenue collection, according to the Ministry of Finance's Monthly Economic Update & Outlook report.
The overall fiscal surplus shrank to 0.8% of GDP (Rs1.198 trillion) from 1.7% of GDP (Rs2.124 trillion) in the same period last year, while the primary surplus fell to 1.6% of GDP (Rs2.3 trillion) from 2.3% of GDP (Rs2.94 trillion). The government vowed to maintain fiscal stability through enhanced revenue collection and responsible expenditure management.
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