Pakistan to unveil today more than $60 billion budget for next fiscal year

ISLAMABAD: Pakistan is set to unveil a federal budget exceeding Rs17 trillion ($60 billion) today, Friday, for fiscal year 2026-27 as the government seeks to balance fiscal consolidation commitments under an International Monetary Fund (IMF) program with demands for economic growth, inflation relief and increased development spending. Pakistan’s government twice postponed Federal Budget 2026-27 this month as it continued consultations with coalition partners over key decisions. The government eyes 4 percent economic growth in the next fiscal year and plans to collect more than Rs15 trillion ($54 billion) in taxes. Finance Minister Muhammad Aurangzeb will present the fiscal plan in the National Assembly, the lower house of parliament, this afternoon and will detail his government’s priorities regarding key economic sectors for fiscal year 2026-27. The budget will be later presented in the Senate, the upper house of parliament. This week, Pakistan’s National Economic Council approved a development budget of Rs3,669 billion ($13 billion) for the next fiscal year, including Rs1,000 billion ($3.5 billion) for the federal Public Sector Development Program (PSDP), Rs2,218 billion ($7.9 billion) for provincial development program, and Rs451 billion ($1.6 billion) for state enterprises. “The National Economic Council directed the relevant ministries, provinces and government agencies to work with the Ministry of Planning to achieve goals of the proposed annual plan 2026-2027,” Prime Minister Shehbaz Sharif’s office said. Pakistan seeks to maintain fiscal discipline under its IMF program while also responding to demands for tax relief and increased social spending. According to officials, the IMF has asked Pakistan to introduce at least Rs430 billion ($1.5 billion) in additional fiscal measures in the upcoming budget, alongside a nearly matching contribution from the provinces. Pakistan’s economy expanded 3.7 percent and reached a record size of $452.1 billion in the outgoing fiscal year 2025-26, according to the Economic Survey released on Thursday. The survey is an annual government document that reviews the performance of key sectors in the outgoing fiscal year and is traditionally released a day before the federal budget. It attributed the improvement to stronger manufacturing activity, easing inflation and a more stable external position despite regional tensions, volatile energy prices and global economic uncertainty. Average consumer inflation stood at 6.7 percent during the July-May period, compared with 4.5 percent in FY25 and 23.4 percent in FY24, according to the survey, which said price stability was largely maintained despite the impact of regional conflict on energy prices. The current account deficit stood at $252 million during July-April, while foreign exchange reserves rose to $17.2 billion by May 29, up 49 percent from a year earlier.