The government announced the retirement of 1.9 trillion rupees of debt, supported by record high revenues from the Petroleum Development Levy (PDL) and big profits from the State Bank of Pakistan (SBP), driven by high interest rates and low inflation. .
According to the Ministry of Finance’s monthly economic update and outlook (November 2024), the economy is showing signs of a sustained recovery, supported by subdued inflation, rising remittances, IT exports, and stable external and fiscal outlook.
The government has taken down 1.87 trillion rupees of debt compared to 753 billion rupees in the same period last year, while private sector borrowing reached 447 billion rupees, a stark contrast to the repayments of 153 billion rupees recorded last year.
This was made possible by the 186% growth in federal revenues, which was largely attributable to the State Bank of Pakistan’s Rs2.5 trillion surplus profits and oil tax.
Net federal revenues rose to 4.02 trillion rupiah, compared to 1.41 trillion rupiah last year, with tax revenues rising by 25.5% and non-tax revenues by 567%.
Meanwhile, total expenses rose marginally by 1.8% to Rp2.48 trillion, supported by a 5.3% decline in profit margin expenses due to lower interest rates. This fiscal discipline resulted in a fiscal surplus of 1.9 trillion rupees (1.5% of GDP) compared to a deficit of 981 billion rupees last year, with the primary surplus reaching 3.2 trillion rupees (2.6% of GDP).
Both the current account and fiscal balance recorded a surplus during the first four months of fiscal year 2025, reversing the persistent deficit. The Ministry indicated that exports are expected to range between $2.5 and $3 billion, imports between $4.5 and $4.9 billion, and remittances between $2.8 and $3.3 billion in November, which maintains the positive track of the external sector.
The Ministry of Finance highlighted the progress made in the agriculture sector, noting a 70.9% increase in agricultural machinery imports during the July-October period of fiscal year 2025. Wheat cultivation is on track to achieve the goals, supported by the timely availability of inputs at reasonable prices. In October, DAP sales rose 92% year-on-year to 309,000 tons, although urea sales fell 22% to 358,000 tons.
While large scale manufacturing (LSM) continues to face challenges, monthly growth shows resilience in key sectors such as textiles and automobiles. The ministry expressed cautious optimism about a gradual recovery, citing fiscal consolidation and external stability as critical drivers.