Budget 2025-26: Pakistan Unveils Rs 17.57 Trillion Blueprint with Growth, Defense, and Tax Reforms
Islamabad (Monitoring Desk): Pakistan’s Finance Minister, Muhammad Aurangzeb, presented the Federal Budget for fiscal year 2025-26 on 10 June 2025, unveiling a total outlay of Rs 17.573 trillion.The National Assembly passed the budget on 26 June, followed by presidential assent on 27–29 June 2025.
Key Highlights of Budget 2025-26
Overall spending cut by 7%, from previous levels, while defense allocation increases by 20% to Rs 2.55 trillion (~$9 billion).. This reflects heightened regional tensions and follows last month’s military confrontation with India..
Growth target set at 4.2%, up from the previous year’s 2.7%, backed by an IMF-backed reform program aiming to increase revenues by over 14% and reduce the fiscal deficit to 3.9% of GDP.
Tax and structural reforms include expanding the tax base to cover agriculture, retail, and real estate; reducing custom duties on imports; and introducing new levies on digital economy and carbon emissions.
Sectoral rebounds and development spending: The industrial sector grew 4.77%, construction up 6.61%, and services (notably ICT) rose 6.48%..
The Annual National Development Programme (ANDP) has Rs 3,483 billion allocated—Rs 1,100 billion for federal and Rs 2,383 billion for provincial projects RSM Global.
What It Means for Pakistan
Balanced yet ambitious path: The budget reflects a push toward investment-led growth, aiming to improve fiscal health while courting IMF support.
Challenges lurk: Analysts question realism of GDP targets, pointing to persistent underperformance in agriculture and manufacturing, and historical revenue shortfalls.
Defense vs. development tension: The strong increase in military spending may raise concerns about resource diversion from critical areas such as education and climate resilience.
Further Reading
For more insights into Pakistan’s federal budget and policy outlook, consult the full Budget in Brief published by the Finance Division.. Also, explore company formation services and regulatory support at companyregistrationpakistan.com