Adviser to the Finance Minister Khurram Schehzad on Tuesday said that the first time in country’s history, the fiscal deficit has fallen below 1% of GDP, alongside record primary surpluses, resilient external account and strengthening macroeconomic stability.
“Country’s fiscal deficit declined to just 0.7% of GDP in first 09 months of the fiscal year 2026 as compared to the 2.6% of same period of the last year, the lowest level ever recorded in Pakistan’s history”, he posted on his official X handle.
The latest fiscal data reflects a broader shift toward credible macroeconomic management, stronger sovereign fundamentals and sustainable growth, he added.
The primary surplus reached 3.2% of GDP during the first 09 months of fiscal year 2026, following an exceptionally strong surplus of 3.0% in first 09 months of the fiscal year 2025, reflecting prudent and disciplined fiscal management, he said adding that this reflects improving public finances alongside economic stability and growth recovery.
Revenue performance improving structurally, he said adding that the tax-to-GDP and total revenue-to-GDP have continued to improve steadily over the last 2 years. The tax revenues continued to rise among the strongest improvements in recent years. He said that the improvement reflects sustained reforms, stronger compliance, digitization, and better fiscal administration.
The total expenditures remain well controlled despite global inflationary pressures and legacy debt servicing obligations, he said adding that the current expenditure has stabilized, while development spending has been maintained to support long-term growth. He said that the defence expenditure as % of GDP has broadly remained contained over time, highlighting overall fiscal discipline.
Khurram said that the sustained primary surpluses are improving Pakistan’s debt dynamics and strengthening sovereign sustainability, adding that the public debt ratios are gradually declining, refinancing risks are easing and debt maturities are improving. He said that the fiscal adjustment is reducing vulnerabilities and strengthening the foundations of long-term macroeconomic stability.
This reinforces macroeconomic stability through fiscal consolidation, reserve accumulation, exchange rate stability, moderating inflation, and improving investor sentiment, he added.