The Federal Board of Revenue (FBR) has registered a revenue shortfall of Rs868 billion in the first 11 months of the fiscal year 2025-26.

The tax office collected Rs11.227 trillion for July to May against a revised target of Rs12.095 trillion leaving a huge gap.

The expanding difference is attributed to two key issues, according to the reports: slower economic activity due to the ongoing Gulf conflict and the impact of the longer Eid festivities. Revenue shortfall reached Rs 184 billion in only May alone.

The FBR has collected Rs966 billion in May on a provisional basis against the monthly target of Rs1.15 trillion. Officials are still hopeful that once changes are made, the final tally for the month could be a little better.

To fulfil the revised yearly income target of Rs13.979 trillion by June 30, the FBR will have to collect almost Rs2.752 trillion in June – a daunting undertaking considering the current trend.

The tax collection target was originally set at Rs14.13 trillion by the Parliament but was then cut down to Rs13.979 trillion after an agreement with the International Monetary Fund (IMF).

As the fiscal year comes to a finish, the FBR appears to be on track for a total shortfall around Rs1 trillion. Crossing the Rs13 trillion collection mark would be a significant achievement in the current economic scenario, officials feel.

The federal government announced a major cut in fuel and diesel prices, bringing respite to the public on the third day of Eid.

Prime Minister Shehbaz Sharif had assured the public that relief would be delivered as soon as fiscal room was available and the government has now met his commitment, a statement published by the Prime Minister’s Office stated.

It said petrol prices have been decreased by Rs 22 per litre and diesel prices has been reduced by Rs 22 per litre.

Petrol Rs381.78, diesel Rs380.78/litre after Rs22 cut

“Relief to the public is my top priority,” said Prime Minister Shehbaz Sharif, adding that the government had announced similar cutbacks last week.

Even under the terrible economic situations, the government continued to give relief for the consumers with subsidies for public transport, goods transport, motorcyclists and rickshaw users, the statement further said.

It said Pakistan had secured availability of fuel in times of lineups in other nations and credited the maintenance of supply to the prompt decisions taken by the administration.

When the global oil crisis started, the government had provided subsidies of more than Rs130/litre to prevent steep hikes in domestic costs of gasoline, despite growing international rates, it said, adding that the benefit was transferred directly to the people.

– Stock markets were mixed while oil prices fell again on Friday (May 29) on investor optimism that the United States and Iran would reach a deal to extend their ceasefire – despite Washington and Tehran offering conflicting views on the state of negotiations.

Oil markets have been up and down this week as investors assess the chances of a breakthrough deal that could potentially resume shipping through the crucial Strait of Hormuz.

Those hopes had been briefly dashed by new US military strikes on Iran on Wednesday, countered by the Revolutionary Guard’s targeting of an American airbase in the region.

On Friday, US President Donald Trump held a meeting during which he said he would make a “final determination” on a peace deal. Iran’s foreign ministry said negotiations were ongoing and there was no final agreement.

Nevertheless, the reports of progress sent the S&P 500 to a record high before it pared those gains slightly at the close. Other Wall Street indices also rose on Friday, while Europe’s main markets were flat ahead of the weekend.

While details of the possible agreement are scarce, “oil traders are taking an optimistic view that the end could be in sight for disruption in the region,” said Derren Nathan, head of equity research at Hargreaves Lansdown.

However, “the market’s patience may be tested if a deal is not agreed by early June, and this could have big ramifications for the oil price and the global stock market rally,” said Kathleen Brooks, research director at XTB.

Art Hogan of B. Riley Wealth Management told AFP the tech sector was continuing to drive equity markets.

“It looks like we’ll wrap up a ninth consecutive week of higher markets, largely driven by some new names coming out to be beneficiaries of artificial intelligence today,” he said, citing Dell, Micron and SanDisk among individual companies that have delivered big gains.

EUROPEAN INFLATION

In Europe, French data showed Friday that its economy contracted 0.1 per cent in the first quarter, while inflation in May accelerated to 2.4 per cent, above the ECB’s target of two percent.

Germany saw inflation slow in May to 2.6 per cent, though analysts still expect an interest rate hike for the eurozone, possibly at the next ECB meeting on June 11.

Still, “recession risks are easing as oil prices moderate and the probability of worst-case scenarios fades,” wrote Matthew Martin of Oxford Economics.

“While reduced risks from the war have helped, the improvement in equity prices is mostly because of a robust earnings season. The driver is overwhelmingly AI-related capital expenditure,” he said.

Global AI bullishness has driven a historic rally recently, this week pushing the market capitalizations of chipmakers Micron and SK hynix across the US$1 trillion threshold.

Seoul’s stock market led the charge in Asia on Friday, surging 3.6 per cent while Tokyo’s Nikkei closed at a record high.