The Govt expenses FY26 recorded a sharp increase during the first half of the fiscal year, with total federal government expenditure reaching Rs. 10.141 trillion between July and December, according to data released by the Ministry of Finance.
Official documents reveal that Govt expenses FY26 accelerated notably in the second quarter, as spending rose by Rs. 606.1 billion compared to the first quarter of the fiscal year, highlighting rising fiscal pressures.
Quarterly Impact of Govt Expenses FY26
Due to the surge in Govt expenses FY26, the budget balance during the July–September period deteriorated significantly, falling from Rs. 2.119 trillion to Rs. 541 billion, reflecting increasing expenditure obligations.
Despite the rise in Govt expenses FY26, the government managed to post a primary surplus of Rs. 4.105 trillion during July–December, indicating fiscal consolidation before accounting for debt servicing costs.
Revenue Performance Against Govt Expenses FY26
During the six-month period, total government revenue reached Rs. 10.683 trillion. Tax revenue amounted to Rs. 6.729 trillion, while non-tax revenue stood at Rs. 3.954 trillion, helping partially offset Govt expenses FY26.
Federal and Provincial Revenue Breakdown
Federal government revenue during the period totaled Rs. 6.160 trillion, whereas provincial revenue contributions reached Rs. 568 billion, according to Ministry of Finance records.
Major Expenditure Heads in Govt Expenses FY26
Debt servicing remained the largest component of Govt expenses FY26, with interest payments totaling Rs. 3.563 trillion in the first half of the fiscal year. Defence spending during July–December amounted to Rs. 1.044 trillion.
Borrowing to Finance Govt Expenses FY26
To meet financing needs, the government borrowed Rs. 34 billion from external sources and Rs. 575 billion from domestic sources during the six-month period.
Other significant components of Govt expenses FY26 included Rs. 504 billion spent on pensions, Rs. 380 billion on civil government operations, and Rs. 462 billion allocated to subsidies.
Levy Collections Supporting Govt Expenses FY26
On the revenue side, the government collected Rs. 822 billion through the Petroleum Development Levy, Rs. 8.8 billion via the CPP levy, and Rs. 25 billion from the carbon levy, as per official documentation.
Additionally, the State Bank of Pakistan transferred a profit of Rs. 2.428 trillion to the federal government during July–December, providing critical support amid rising Govt expenses FY26.
Provincial Transfers Under NFC Award
Under the National Finance Commission Award, provinces received a total of Rs. 3.616 trillion during the current fiscal year so far. Punjab received Rs. 1.796 trillion, Sindh Rs. 901 billion, Khyber Pakhtunkhwa Rs. 586 billion, and Balochistan Rs. 322 billion, according to official figures.
