Pakistan posts strongest fiscal turnaround in decades

Mettis Global reported that Pakistan ended FY26 with a marked improvement in public finances, moving away from repeated fiscal strain. The fiscal deficit fell to 2.6% of GDP, its lowest in 22 years. Primary surplus came in at 2.9% of GDP, which is the peak recorded in at least 26 years.

Pakistan recorded primary surpluses for three straight years. Debt growth slowed to its lowest level in 20 years, while the debt-to-GDP ratio and the interest burden both declined. Rating agency S&P responded by raising Pakistan's rating to B, with a Stable outlook, citing stronger fiscal consolidation.

Mettis Global describes the change as a move away from ongoing budget pressure toward a firmer footing, with greater stability and longer-lasting growth. Over a span of three years, the deficit narrowed by 5.2 percentage points, according to the report. Together, these indicators point to a sustained shift in the country's fiscal position over the period covered.