Pakistan to Announce Rs17.6 Trillion Federal Budget 2025-26 on June 4
📌 Key Highlights
- Total federal outlay: Rs17.57–17.6 trillion, down ~7% from last year’s Rs18.9 trillion
- Defence allocation: ↑20% to Rs2.55 trillion (~$9 bn)
- GDP growth target: 4.2%, with a fiscal deficit projected at 3.9% of GDP
- Inflation target: 7.5% for FY 2025‑26
- Interest payments: around Rs8.2 trillion, down from last year’s Rs9.7 trillion.
- Tax collection goal: FBR target Rs14.1 trillion, non-tax revenue Rs4–4.5 trillion
📈 Strategic Shift
Pakistan’s government has trimmed overall expenditure, reallocating resources to defence amid recent conflict with India. The budget also reflects cautious economic optimism, aiming to balance growth goals with fiscal discipline .
💼 Key Sectoral Moves
Defence & Security
Defence spending increased sharply as a response to April–May border tensions. Total military outlays—including pensions—reach Rs3.29 trillion .
Public Finance & Salaries
- Proposed salary increase: 7.5–10%, with a pension hike of 5–7.5% .
- Tax relief: Various slabs reduced—for salaried, corporate, real estate—with lower withholding and super tax cuts.
Development Spending
- PSDP allocation: Rs1 trillion, funding infrastructure, energy, water, and regional initiatives.
🌍 Economic Outlook
- Growth: 4.2% target, with last year at around 2.7% .
- Continues IMF‑guided reforms aimed at economic stability and privatization .
🔍 Bottom Line
Pakistan’s Rs17.6 trillion budget marks a significant reorientation: a 7% overall cut with strategic investment in defence and debt servicing, while pursuing economic growth and social welfare through measured tax relief.
