- The proposed tax revenue target is Rp15.267 trillion.
- The defense allocation is expected to reach Rs 3 trillion.
- Opposition plans protests during budget proceedings.
ISLAMABAD: The federal government will present the budget for the fiscal year 2026-27 in the National Assembly today (Friday), with an estimated outlay of around Rs 17.5 trillion.
Finance and Revenue Minister Senator Muhammad Aurangzeb will present the 2026-27 budget before the National Assembly, whose session will begin at 3 pm.
Sources said Geographic news that the government is expected to set a tax revenue target of Rp15.267 trillion, while Rp7.824 trillion has been allocated to debt service. The proposed defense allocation is expected to amount to Rs 3 trillion.
Sources added that the government is also considering an increase in salaries and pensions of government employees. The budget is expected to include a plan to raise Rp1.727 trillion through oil tax.
For the next fiscal year, the government is likely to set an export target of $32.8 billion and an import target of $70 billion.
No new development plans are expected to be launched from the budget, but resources will be focused on the completion of ongoing projects.
Sources further said that the government may withdraw the tax exemption currently available for the erstwhile Federally Administered Tribal Areas (Fata).
Ahead of the budget presentation, Prime Minister Shehbaz Sharif called a federal cabinet meeting in Parliament at 2:30 pm today to approve the draft budget.
Finance Minister Aurangzeb will brief cabinet members on the key features of the budget before its formal presentation in parliament.
Meanwhile, the opposition has decided not to boycott the budget session.
The decision was made during a joint parliamentary meeting of opposition parties, which resolved to continue protests both inside and outside parliament.
The opposition leaders also reiterated their demand for a meeting and the release of Pakistan Tehreek-e-Insaf (PTI) founder Imran Khan and vowed to continue their protest campaign until such a meeting takes place.
‘The economy grows 3.7% in fiscal year 26’
A day earlier, the government released the Pakistan Economic Survey (PES) for the fiscal year 2025-26, with Finance Minister Aurangzeb saying that Pakistan’s gross domestic product (GDP) reached its highest ever size (3.7 percent), but the South Asian nation missed its growth target due to external shocks.
Flanked by his cabinet colleagues, the Finance Minister told reporters that the nation, badly hit by an energy crisis due to tensions in the Middle East, missed its projected growth target of 4% despite recording its highest GDP growth of 3.7% in four years.
The GDP growth rate was 3.7% against the planned target of 4.2%. Inflation recovered after the US-Iran war and reached double digits. Exports decreased, imports increased, the FBR’s tax collection target was not met and public debt in absolute figures shot up in 2025-26.
Per capita income rose to $1,901 in 2025-26, compared to $1,751 in the previous fiscal year. The size of Pakistan’s economy in dollar terms reached $452 billion in FY26, up from $408 billion in the previous fiscal year. In rupee terms, the size of the economy stood at 126.9 trillion rupees, an increase of 11.3% from 114 trillion rupees a year earlier. The exchange rate remained stable at Rs 280.65 per US dollar compared to Rs 279.35 per US dollar in FY2025.
Net foreign direct investment recorded inflows of $1.4 billion, led by China and Hong Kong, with the electricity sector and financial services attracting the largest proportion. As of April 17, 2026, foreign exchange reserves stood at $20.6 billion, including $15.1 billion held by the State Bank of Pakistan (SBP), reflecting strengthening external reserves. From July to March, the fiscal deficit stood at 0.7%, while the primary surplus was 3.2%. From July to March, the current account surplus stood at $72 million.
“This Economic Survey for 2025-26 tells the story of the outgoing fiscal year. Three major factors tested Pakistan’s resilience (tariff war, floods affecting the country’s largest province and conflict in ME), resulting in lower growth, while inflation also recovered,” Aurangzeb said.
The poverty rate in Pakistan stood at 28.9% and the unemployment rate increased to 7.1% in 2024-25.
The minister said Pakistan would have to avoid a boom-bust cycle as accelerated growth resulted in the creation of twin deficits; However, the government did not repeat this type of higher growth. He said there were no sacred cows and that everyone would have to pay their fair share of taxes.
The agricultural sector recorded growth of 2.89%, driven by important crops and livestock. The industrial sector recorded a growth of 3.51%, supported by strong growth (6.11%) in large scale manufacturing (LSM). The services sector, as the largest contributor to GDP (58.42% of GDP), grew by 4.09%, supported by strong growth in information and communications services (7.52%).
