ISLAMABAD:
The federal government has set out key priorities for the 2026-27 federal budget, aiming for a GDP growth target of 5.1% and keeping inflation below 6.5%, while highlighting green development, climate action and better disaster management as central themes.
The Finance Ministry has formally approved the budget preparation schedule for the next financial year and the interim macroeconomic framework is expected to be prepared within the current month, according to an official circular.
The mid-year review report will be tabled in the National Assembly in February. All ministries have been directed to submit key budget forms, revised revenue and expenditure estimates and detailed development project plans by February 20.
According to the ministry, inflation is expected to remain contained at 6.5% in the next budget. Special emphasis will be placed on green taxes, non-tax revenues and climate-related subsidies.
Ministries have also been directed to identify environmental and climate-related expenditures, while it has been made mandatory to separately label climate change-related revenues and expenditures.
A strengthened disaster budgeting framework is also being planned to mitigate the impact of natural calamities, with separate tracking of disaster-related expenditure. The government intends to divide natural resource categories and subsidies into climate action measures.
Accordingly, agricultural insurance and climate-resilient infrastructure adaptation will be included in “climate adaptation,” while clean energy initiatives and electric vehicles will be included in “climate mitigation” subsidies.
The ministry has stressed that non-tax revenue will be evaluated based on environmental impact. Taxes on activities that cause pollution will be linked to climate goals, while energy, transport and pollution management will receive priority on the green revenue agenda.
The budget calendar has also been detailed. Thus, the Budget Review Committee meetings are scheduled from March 30 to April 12, while information on the exchange rate will be shared on April 15.
Approval of the Budget Strategy Paper is expected on April 20, followed by the issuance of budget caps for current and development expenditures between April 21 and 25. The Annual Plan Coordination Committee meetings will be held in the first week of May.
This will be followed by a session of the National Economic Council in the second week of May. All budget documents are expected to be finalized by the end of May and quarterly estimates will be submitted by June 30.
