The Ministry of Finance has released its latest Monthly Economic Outlook Report, revealing a significant rise in government spending and a narrowing budget deficit, alongside notable gains in revenue and remittances during the first 10 months of the current fiscal year.

According to the report, government expenditure surged by 18%, reaching Rs12,948 billion from July to April. During the same period, the budget deficit stood at Rs3,689 billion.

Revenue and remittances see robust growth

The report noted a 26% increase in government revenues, supported by continued economic reforms and enhanced tax compliance. The Federal Board of Revenue (FBR) collected Rs11,136 billion in taxes as of May 31.

A strong uptick in overseas remittances, which grew by 28.8%, also contributed to a healthier external account. In May alone, 59,995 Pakistanis went abroad for employment, boosting foreign inflows. The ministry confirmed that the external payments account remained in surplus, aided by both higher remittances and improved exports.

Inflation, industrial outlook, reform commitments

Despite concerns stemming from the recent Iran-Israel conflict, the ministry projects inflation to remain within 3% to 4% in June. The report also anticipates growth in large-scale manufacturing (LSM), particularly due to rising activity in the cement and construction sectors.

The ministry reiterated the government’s commitment to structural reforms, including privatization of state-owned enterprises, in line with the International Monetary Fund (IMF) program.

“Investor confidence has improved due to the IMF program and Pakistan’s upgraded credit rating,” the report noted.

Social support, financial inclusion

On the social welfare front, the government disbursed Rs411 billion under the Benazir Income Support Programme (BISP). Additionally, interest-free loans worth Rs984 million were granted to 18,525 individuals in May to support financial inclusion and poverty alleviation.