Pakistan Set to Present Rs17.6 Trillion Federal Budget for FY2025-26 Tomorrow

Pakistan is set to unveil its federal budget for the fiscal year 2025-26 on Tuesday, June 10, with a proposed outlay of Rs17,600 billion, amid high inflation, rising debt, and ongoing negotiations with the International Monetary Fund (IMF). Finance Minister Muhammad Aurangzeb will present the budget in the National Assembly.

Ahead of the federal budget 2025-26, the National Economic Survey will be released today (Monday), providing a comprehensive overview of the country’s economic performance over the past year.

Revenue and Taxation Targets

According to official sources, the government estimates total revenue collection at Rs19,400 billion. The Federal Board of Revenue (FBR) has been tasked with achieving a tax collection target of Rs14,130 billion.

Major Allocations: Debt Servicing and Budget Deficit

A significant portion of the proposed budget—Rs6,200 billion—will go towards debt servicing, highlighting Pakistan’s heavy domestic and external borrowing burden. Despite this, the budget deficit target is expected to remain unchanged, reflecting the government’s efforts to maintain fiscal discipline.

Relief Measures for Public Sector

To cushion the impact of inflation, the government is proposing a 10% salary increase for government employees. Pensions for retired public servants are likely to be raised by 5% to 7.5%.

Sectoral Allocations: Defense, Health, Education, IT

The defense budget is expected to rise by 18%, influenced by regional security needs and inflationary trends. Development allocations include:

• Rs13.58 billion for education

• Rs14.3 billion for the health sector

• Rs16.22 billion for the digital economy and IT sector

These allocations aim to modernize key sectors and promote youth employment.

Budget 2025-26 Schedule

Speaker Sardar Ayaz Sadiq has finalized the National Assembly’s budget session calendar. Key dates include:

• June 10: Budget presentation

• June 11–12: No assembly meetings

• June 13–21: General debate on budget

• June 22: Break

• June 23: Discussion on necessary expenditures

• June 24–25: Voting on demands, grants, and cut motions

• June 26: Debate and vote on Finance Bill; formal approval

• June 27: Conclusion with voting on supplementary grants

Changes to the schedule can only be made with the speaker’s approval.

Economic Survey Highlights

Preliminary figures indicate that Pakistan missed several key economic targets for the outgoing fiscal year:

• GDP Growth: Recorded at 2.7%, below the 3.6% target

• Inflation: Limited to 5%, significantly under the 12% target

• Per Capita Income: Reached Rs509,174 against a target of Rs543,968

Sectoral Performance

• Agriculture: Underperformed with 0.6% growth vs. 2% target; major crop output declined sharply, including cotton (-30.7%) and wheat (-8.9%)

• Industry: Achieved 4.8% growth, surpassing its 4.4% target, driven by gains in textiles, automobiles, and garments

• Services: Grew by 2.9%, short of the 4.1% target

• Construction: Outperformed with 6.6% growth vs. 5.5% target

• Electricity, Gas & Water Supply: Surged by 28.9%, well above the 2.5% target

• Education & Health: Grew by 4.4% and 3.7%, both exceeding respective targets

Private sector borrowing jumped from Rs294 billion to Rs870 billion. Total revenue rose by 36.7% to Rs13,367 billion, while the tax-to-GDP ratio improved from 6% to 8%.

The National Economic Survey will be formally released by Finance Minister Muhammad Aurangzeb today at 2:30 pm.

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