The gap between what the government spends and what it collects in revenue, for the full fiscal year.
Consolidated Fiscal Balance — Annual Trend
Source: SBP EasyData, annual fiscal year, consolidated federal and provincial government balance.
The fiscal balance is the difference between total government revenue (taxes, non-tax receipts) and total government spending (current expenditure, development spending, debt servicing) over a fiscal year (July to June in Pakistan).
A negative number is a fiscal deficit — the government spent more than it collected, and the gap must be financed through domestic or external borrowing.
Pakistan has run a fiscal deficit in nearly every year for decades, driven mainly by a narrow tax base, high debt-servicing costs, and large recurring current expenditure relative to revenue collection.
Persistent fiscal deficits force the government to borrow continuously, growing public debt and the interest burden — debt servicing is now one of the largest single items in Pakistan's federal budget.
The fiscal deficit is one of the core conditions IMF programs target directly, since unsustainable deficits financed by central bank money creation or excessive borrowing feed into inflation and currency pressure.
Does Pakistan currently have a fiscal deficit?
Pakistan's most recent consolidated fiscal balance is -6.17 T PKR for the fiscal year, which is a deficit.
Why does Pakistan run a fiscal deficit?
Pakistan's fiscal deficit is driven by a narrow tax base relative to the size of its economy, high and rising debt-servicing costs, and government spending commitments that have historically grown faster than revenue collection.
How is Pakistan's fiscal deficit financed?
The deficit is financed through a mix of domestic borrowing (Treasury Bills, Pakistan Investment Bonds) and external borrowing (multilateral lenders like the IMF and World Bank, bilateral loans, and Eurobonds).
What's the difference between the fiscal deficit and the current account deficit?
The fiscal deficit measures the government's own spending versus revenue gap. The current account deficit measures the whole country's international transactions. The two are related — a large fiscal deficit can spill over into a wider current account deficit — but they are measured and financed differently.
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