Parliament approves 62 billion USD Pakistan budget for upcoming financial period
Updated Article
PAKISTAN'S PARLIAMENT APPROVES BUDGET, EYEING GROWTH AND FISCAL STABILITY
Islamabad—In a significant move, Pakistan's lower house of parliament passed a budget for the upcoming fiscal year worth an estimated 17,573 billion rupees on Thursday (local time). This budget focuses on sustainable, inclusive economic growth, as reported by Radio Pakistan.
The Budget Breakdown
The new budget retains an emphasis on managing the nation's debt, with a staggering 44% of the total expenditures—equating to nearly 8.21 trillion rupees ($29 billion)—earmarked for debt servicing.
Defense spending, set to increase by 20%, will amount to about 2.55 trillion rupees ($9.04 billion) in FY26, reflecting Pakistan's escalating security concerns, with tensions mounting with neighboring India.
Growth on the Horizon
Although Pakistan's economy expanded by just 2.6% in 2024/25, falling short of the 3.6% target, the budget takes a cautiously optimistic stance. Officially, the government targets a 4.2% economic growth rate for FY26, signaling a recovery amidst ongoing fiscal reform efforts.
Balancing Act
Pakistan remains under the scrutiny of the International Monetary Fund (IMF), with a $7 billion loan program in place. The budget objectives align with both security concerns and fiscal reform efforts, aiming to reduce the fiscal deficit to 3.9% of the GDP and cap the inflation rate at 7.5%.
Revenue Collection Target
To meet its revenue goals, the Federal Board of Revenue (FBR)—Pakistan's main tax authority—has been charged with collecting 14.1 trillion rupees, which represents a 19% year-on-year increase. The government intends to raise the tax-to-GDP ratio to 14%.
Looking Ahead
The budget is likely to shape the economic landscape of Pakistan for the coming year. With a blend of fiscal restraint, growth incentives, and infrastructure investment, the nation aims to maintain macroeconomic stability while spurring sustainable economic growth.
- The 'finance' and 'economy' sectors are central focus points in the newly approved budget in Pakistan, as the country strives for sustainable, inclusive growth.
- In tandem with 'politics' and 'security' concerns, the budget also aims to satisfy the conditionalities set by the International Monetary Fund, as a $7 billion loan program is currently in effect.
- The 'culture' and 'art' community in Pakistan might also find interest in the budget, as it includes provisions for infrastructure investment, which could potentially stimulate economic growth.
- The 'business' and 'general-news' communities should monitor Pakistan's economy closely, as the budget outlines attempt to strike a balance between debt management, economic expansion, and fiscal deficit reduction goals.
