Govt. budget deficit down 32% in 1H 2025

New Finance Ministry report says 1H revenue up 24.7% to Rs. 2.3 t Revenue collection in 1H 46.9% of annual target Vehicle tax collection surges 335% to Rs. 129 b, as flagged by IMF in its July review Expenditure grows 10.9% to Rs. 2.7 t, but capital spending critical for growth declines

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A new report released by the Finance Ministry yesterday showed that the fiscal deficit had contracted by 32.3% from a year ago to Rs. 405.6 billion during the first half of 2025.

This is an encouraging indicator that the Government was sticking to its economic stabilisation path. The 'Fiscal Review Report January - July 2025' said the fiscal deficit decline was mainly due to the 24.7% increase in Government revenue, including grants, to Rs. 2.3 trillion in this period, up from Rs. 1.8 trillion a year earlier.

Income tax revenue increased to Rs. 489 billion, up 9.2% from Rs. 447 billion a year ago, while VAT collections rose 27.6% to Rs876 billion, up from Rs. 645 billion a year ago.