Finance Minister Muhammad Aurangzeb has presented Pakistan’s federal budget for fiscal year 2026-27 with a total outlay of Rs18.77 trillion, outlining measures aimed at maintaining economic stability, supporting development and strengthening fiscal discipline.
Presenting the budget in the National Assembly of Pakistan, the minister said the government’s economic strategy focuses on controlling inflation, improving revenue collection and sustaining growth amid regional and global challenges.
A major portion of the budget has been allocated to debt servicing, with Rs8.054 trillion set aside for mark-up payments on public debt. Defence spending has been allocated Rs3 trillion, reflecting the government’s emphasis on national security and military preparedness.
The Public Sector Development Programme (PSDP) has been allocated Rs3.675 trillion, including federal, provincial and state-owned enterprise projects. Key investment areas include transport, communication, energy, water resources, information technology, education and healthcare.
The government reported improvements in several macroeconomic indicators, including a reduction in the fiscal deficit and a rise in the tax-to-GDP ratio. Inflation is projected to remain around 7 percent, while authorities expect continued economic recovery supported by reforms and improved investor confidence.
The budget also introduces tax relief for salaried individuals through lower tax rates across multiple income brackets. For businesses, the government has reduced the super tax on higher-income companies and abolished it for firms earning up to Rs500 million annually.
In the social sector, Rs25.1 billion has been allocated for health projects, while higher education funding has increased to Rs46 billion. Additional resources have also been earmarked for science, technology and innovation initiatives.
The government highlighted progress in privatisation, corporate sector growth and foreign investment, while projecting remittances above $41 billion and foreign exchange reserves of approximately $17 billion.
Officials described the budget as a balance between fiscal responsibility, economic growth and development priorities for the coming year.