PIAF hails govt’s rare Rs2.12tr fiscal surplus, calls for stronger measures for high-growth

Islamabad
Pakistan Industrial and Traders Associations Fron (PIAF) Chairman and LCCI President Faheemur Rehman Saigol welcomed the government’s announcement of a rare fiscal surplus of Rs2.12 trillion in the first quarter of the current fiscal year, describing it as a “positive step” toward fiscal stability. However, he cautioned that more comprehensive measures were needed to translate this achievement into sustained high-speed economic growth.
The Ministry of Finance reported that the surplus, equivalent to 1.6 percent of GDP, was primarily supported by record profits of the State Bank of Pakistan (SBP), a 30 percent surge in petroleum levy collections, and strong provincial cash surpluses. While the absolute figure represented a 10 percent increase from Rs1.896 trillion in the same period last year, the primary balance stood at 2.7 percent of GDP, slightly lower than last year’s 2.8 percent.
In a joint statement along with senior vice chairman Nasrullah Mughal and vice chairman Tahir Manzoor Chaudhary, Faheem praised the government for demonstrating fiscal discipline, noting that “rare fiscal surpluses like this one send a positive signal to investors and markets that Pakistan is taking steps toward stabilizing its economy.” He emphasized that the strong performance of the SBP, driven by the record-high 22 percent policy rate, had played a crucial role in bolstering government revenues.
“The government’s ability to mobilize Rs3.15 trillion in tax receipts and witness a 54 percent rise in provincial cash surpluses reflects effective fiscal management,” Saigol said. Punjab alone posted a record Rs442 billion surplus, while Sindh, Khyber Pakhtunkhwa, and Balochistan contributed Rs209 billion, Rs77 billion, and Rs54 billion respectively.
Despite this achievement, Nasrullah Mughal expressed concern that the surplus alone is insufficient to ensure high-speed economic growth. He noted that total revenues rose by only 6 percent and tax revenues remained flat as a percentage of GDP. Non-tax revenues, excluding SBP profits, fell from 2.7 percent to 2.4 percent of GDP, highlighting the need for a more diversified revenue base.
“In order to achieve sustainable growth, Pakistan must focus on expanding industrial and agricultural production, enhancing exports, and incentivizing private investment,” he said. Saigol recommended a combination of tax reforms, investment-friendly policies, and targeted incentives for key sectors to maximize the economic impact of the fiscal surplus.
Tahir Manzoor Chaudhary also highlighted the importance of managing expenditures efficiently. While total federal spending rose by 3.6 percent in the first quarter, some areas, such as defense and interest payments, remained high. “Prudent expenditure control and transparent fiscal practices are essential to ensure that the surplus contributes meaningfully to economic development rather than being absorbed by routine operational costs,” he added.
The PIAF chairman concluded by urging the government to build on this initial success by implementing policies that stimulate industrial growth, create jobs, and enhance overall productivity. “A one-time fiscal surplus is encouraging, but Pakistan needs a sustained strategy to convert fiscal stability into high-speed economic growth that benefits all sectors of society,” he said.
Chairman Saigol’s remarks come amid ongoing discussions among policymakers, business leaders, and provincial authorities on how to leverage fiscal gains to accelerate development and strengthen the industrial and agricultural base of the country.