Pakistan Likely to Post Largest Primary Surplus in 25 Years

Pakistan is expected to post its largest primary surplus in the current fiscal year. According to Topline Securities, Pakistan is expected to post its largest Primary Surplus of 2 percent of GDP in FY25 in the last 25 years under the new bailout from the International Monetary Fund (IMF). The IMF wants the federal government to achieve a primary surplus, which implies that the country’s expenditures should be lower than its revenues before accounting for interest payments. Expenditures include both current (non-development) and development spending. The federal government has a primary surplus target of Rs. 2.5 trillion (2.0 percent of GDP) for FY25. IMF estimates a primary surplus of 0.4 percent of GDP for FY25 in its May 2024 report. Excluding provincial surplus, the primary surplus would be 1 percent of GDP for FY25 and a deficit of 0.13 percent for FY24E.