Pakistan’s fiscal deficit narrows to 22-year low of 2.6% of GDP in FY26: Schehzad

Business Recorder reported that Pakistan's fiscal deficit contracted to 2.6% of GDP in FY26, a reading not seen in over twenty years. Khurram Schehzad, Adviser to the Finance Minister, disclosed the figure in an X post on Thursday. He said the deficit has dropped for three consecutive years from 7.9% of GDP in FY22, while a primary surplus of 2.9% of GDP was recorded, which he called the most robust fiscal result of the last 22 years.

In rupee terms, the overall shortfall reached Rs3.31 trillion, while the primary surplus came to Rs3.63 trillion. Total revenues were Rs19.8 trillion, of which Rs14.2 trillion came from taxes. Interest costs dropped to roughly Rs6.95 trillion, down from Rs8.9 trillion in the previous year.

Schehzad also cited debt growth at a 20-year low and a debt-to-GDP ratio near 68%, which he linked to lower financing pressure and more room for development. He noted that S&P Global Ratings raised Pakistan's sovereign rating to B from B- in July, citing faster consolidation and rebuilt reserves.