Pakistan Posts Rs 1.27 Trillion Budget Surplus in July to September 2026 as State Bank Profit Falls
Pakistan ran a Rs 1.27 trillion budget surplus in July to September 2026, down from Rs 2.12 trillion, as SBP profit fell Rs 495 billion and interest rose 23%.
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Pakistan ran a budget surplus of Rs 1.27 trillion in July to September 2026, the first quarter of the 2026-27 fiscal year, Finance Division figures released on 13 November show. That is 0.9 per cent of GDP, down from Rs 2.12 trillion a year earlier. The primary surplus, which leaves out interest payments, was Rs 2.97 trillion, or 2.1 per cent of GDP.
The surplus shrank because the State Bank's profit transfer to the government fell by Rs 495 billion, while interest payments and development spending rose. Tax revenue grew 7.4 per cent. All figures are provisional and cover the federal government and the four provinces together.
The surplus fell to Rs 1.27 trillion from Rs 2.12 trillion
The government's income beat its spending by Rs 1,273.8 billion in the first quarter, against Rs 2,119.5 billion in the same quarter of 2025-26. Revenue fell 3.2 per cent to Rs 6,003.8 billion, while spending rose 15.9 per cent to Rs 4,730.1 billion.
| Item | Jul to Sep 2025 (Rs bn) | Jul to Sep 2026 (Rs bn) | Change |
|---|---|---|---|
| Total revenue | 6,199.7 | 6,003.8 | -3.2% |
| Tax revenue | 3,153.3 | 3,387.1 | +7.4% |
| Non-tax revenue | 3,046.4 | 2,616.7 | -14.1% |
| Total spending | 4,080.2 | 4,730.1 | +15.9% |
| Overall balance (surplus) | 2,119.5 | 1,273.8 | -39.9% |
| Primary balance (surplus) | 3,497.3 | 2,973.5 | -15.0% |
A first quarter surplus is not new for Pakistan. In 2025-26 the year started with a Rs 2.12 trillion surplus and ended with a deficit of Rs 3.31 trillion, as set out in the 2025-26 fiscal deficit. The State Bank's profit lands early in the year, while spending builds up later.
The State Bank's profit transfer fell by Rs 495 billion
The biggest single change was the State Bank of Pakistan's surplus profit, which fell from Rs 2,428.4 billion to Rs 1,933.0 billion, a drop of 20.4 per cent. That one line explains more than half of the fall in the surplus.
The State Bank earns mainly from interest on its holdings and passes most of its profit to the government each year. When interest rates fall, that profit usually falls too. Non-tax revenue as a whole fell Rs 429.7 billion, to Rs 2,616.7 billion.
Petroleum levy, the fixed charge on each litre of petrol and diesel, rose 2.7 per cent to Rs 381.8 billion.
Tax revenue rose 7.4 per cent to Rs 3.39 trillion
Federal and provincial taxes together brought in Rs 3,387.1 billion, up Rs 233.8 billion. Sales tax grew fastest among federal taxes, by 11.6 per cent. Direct taxes, mostly income tax, grew 5.5 per cent. Customs duty was almost flat.
| Tax | Jul to Sep 2025 (Rs bn) | Jul to Sep 2026 (Rs bn) | Change |
|---|---|---|---|
| Direct taxes | 1,364.3 | 1,439.8 | +5.5% |
| Sales tax | 1,019.0 | 1,136.9 | +11.6% |
| Customs duty | 310.6 | 312.2 | +0.5% |
| Federal excise | 190.5 | 197.3 | +3.6% |
| Provincial taxes | 268.9 | 300.9 | +11.9% |
Federal taxes came to Rs 3,086.2 billion, 7.0 per cent more than a year earlier. Provincial taxes, led by sales tax on services at Rs 185.1 billion, rose to Rs 300.9 billion. The Federal Board of Revenue's own quarterly target and refunds are covered in FBR's first quarter collection.
Interest payments rose 23.4 per cent to Rs 1.70 trillion
Mark-up, the interest the government pays on its debt, cost Rs 1,699.8 billion in the quarter, up from Rs 1,377.8 billion. That is 36 per cent of all spending by our sum. Domestic debt took Rs 1,493.1 billion of it and foreign debt Rs 206.7 billion.
Other big lines also grew. Defence rose 10.7 per cent to Rs 495.4 billion. Development spending and net lending rose 60.9 per cent to Rs 474.9 billion, of which provinces spent Rs 392.4 billion. Pensions cost Rs 264.0 billion and subsidies Rs 84.6 billion.
Interest is the reason the primary balance is so much larger than the overall balance. Leave interest out and the government took in Rs 2.97 trillion more than it spent. The size of the debt behind those payments is in Pakistan's public debt review.
What the first quarter means for the full year
A surplus in July to September does not mean the year will end in surplus. In 2025-26, a larger first quarter surplus still turned into a full year deficit of 2.6 per cent of GDP. Interest and development spending rise through the year, while the State Bank's profit comes once.
- The State Bank's profit is mostly booked in the first quarter, so later quarters lose that boost.
- Development spending usually speeds up from January to June.
- Interest payments run through the whole year and grew 23.4 per cent this quarter.
- Last year, tax collection in April to June was Rs 4,052.5 billion, against Rs 3,153.3 billion in the first quarter.
The government used the surplus to repay debt. Net domestic borrowing was minus Rs 1,882.6 billion, meaning it paid back more than it borrowed, mostly to banks. It took a net Rs 608.9 billion from abroad. The IMF's view of the year is in the IMF Fiscal Monitor for Pakistan.
Common questions
What was Pakistan's budget balance in July to September 2026?
A surplus of Rs 1,273.8 billion, or 0.9 per cent of GDP, for the federal government and provinces together. The figures are provisional.
Why did the surplus fall from last year?
Mainly because the State Bank's profit transfer fell by Rs 495.4 billion, while interest payments rose Rs 322.0 billion and development spending Rs 179.8 billion.
How much tax did Pakistan collect in the first quarter?
Rs 3,387.1 billion in federal and provincial taxes together, up 7.4 per cent. Federal taxes were Rs 3,086.2 billion.
What is the primary balance?
It is the budget balance before interest payments. In July to September 2026 it was a surplus of Rs 2,973.5 billion, or 2.1 per cent of GDP.
Who publishes these figures?
The Finance Division of the Government of Pakistan, in its consolidated federal and provincial fiscal operations tables, marked provisional.
How much did the government spend on interest?
Rs 1,699.8 billion in the quarter, up 23.4 per cent from Rs 1,377.8 billion a year earlier.
How we verified this
What we checked and where we read it.
Checked on 15 November 2026. The July to September 2026 figures come from the Finance Division's consolidated fiscal operations, July to September 2026-27, marked provisional, with the file dated 13 November 2026. The July to September 2025 comparison comes from the July to September column of the Division's 2025-26 fiscal operations tables. Percentage changes, shares of spending and the reasons listed for the full year pattern are ours. Table 1 gives total spending as Rs 4,730.1 billion after a statistical discrepancy of minus Rs 37.5 billion; Table 3 gives Rs 4,767.6 billion before it.
About the author
Senior Writer, Public Services and Technology
Shahid joined us in 2024 as an author. He is a senior contributor to Pakistan's leading technology websites. He writes detailed articles, mostly covering his expertise in the latest tech, mobiles, apps, gadgets, and step-by-step guides. His ideology is to help people understand the latest trends and explain complex methods through very easy-to-understand guides.
