Finance Minister Aurangzeb presents Budget 2026-27

Finance Minister Aurangzeb presents federal budget for fiscal year 2026-27, as opposition disrupts proceedings with loud chants

Aurangzeb said: “Mr. President, it is a great honor for me to present our government’s third budget for the financial year 2026-27 before this august House.”

“Pakistan and Saudi Arabia have reached a defense agreement, which marks a strategic partnership,” he said.

This budget comes at a time when Pakistan, in the eyes of its people and the world, has achieved the status of a country whose voice is heard and whose friendship is desired, he added.

Our defense industry has also become a source of valuable foreign exchange. This is proof that a strong defense is not only vital for our integrity but can also help the economic development of the country.

He said Pakistan has responded strongly to India’s aggression. India was forced to discuss peace. Our Operation Bunyanum Marsoos was a great success.

Pakistan has achieved massive diplomatic success in recent months and has managed to bring the United States and Iran to the negotiating table to resolve the regional conflict, he added.

The American and Iranian presidents have repeatedly praised the particularly important role of Prime Minister Shehbaz Sharif and COAS and CDF Field Marshal Syed Asim Munir. “This is an unprecedented success that has enhanced our respect and stature in the community of nations, and our efforts have been appreciated at all levels and forums,” he said.

Aurangzeb said Pakistan-China relations remain “an important pillar of the economy”.

Turning to the economy, he said Pakistan’s economic growth reached 3.7 percent in fiscal year 2025-26 despite floods and regional conflicts, while the size of the economy had reached $452 billion.

It said large-scale manufacturing productivity was recording its fastest growth in four years, while per capita income had risen to $1,901.

The Finance Minister said foreign exchange reserves had risen from less than $4 billion three years ago to more than $17 billion, enough for about three months of imports.

Talking about inflation, Aurangzeb said it stood at 7 percent and was expected to decline following the easing of tensions in the Middle East.

“Due to tensions in the Middle East, inflation has increased, but with the resolution of the conflict, the inflation rate will go down,” he said.

He said the recent conflict involving Iran had driven up international gasoline and diesel prices, creating unexpected pressure on household budgets. However, he said the government had not passed on the full impact to consumers and instead provided a targeted oil subsidy of Rs 128 billion during the recent oil crisis.

“Local gasoline and diesel prices do not fully reflect the intense gravity of the international market,” he said.

Aurangzeb also said Pakistan had returned to the international bond market after four years, raising $750 million through Eurobonds.

He added that Pakistan had entered the Chinese capital market for the first time through a Panda bond issue, where demand exceeded expectations.

The minister said that during the year 11 IPOs were launched in the stock market, while more than 250 companies had started businesses in the Special Technology Zones of Pakistan.

“Pakistan’s image has improved significantly and its voice is heard internationally,” he said.

The finance minister said the government was fulfilling its commitment to implement a long-delayed privatization agenda, arguing that the private sector would be the main driver of Pakistan’s future economic growth.

Aurangzeb recalled a promise made during last year’s budget speech.

“During my budget speech in this very House last year, we made a promise to the nation that we would implement the privatization agenda that has been delayed for decades,” he said.

The minister said the government had started privatization of First Women Bank and then completed the sale of Pakistan International Airlines (PIA).

“We started with the privatization of First Women Bank, and then on December 23, 2025, the entire nation witnessed that, through a transparent and live televised auction in Islamabad, Pakistan International Airlines was handed over to the private sector for a total of Rs 185 billion,” he said.

Aurangzeb described the transaction as a “historic and successful privatization” carried out in line with Prime Minister Shehbaz’s vision that the private sector is the guarantor of sustainable economic growth.

“The private sector is going to lead this country,” he told the House.

The Finance Minister said the government’s privatization program would continue and announced that power distribution companies (DISCO), generation companies (GENCO) and airports would also be privatized.

Highlighting the economic reforms, Aurangzeb said the Federal Board of Revenue’s tax collection had increased from Rs 7.2 trillion to Rs 13 trillion in the last three years and was expected to reach Rs 13 trillion by the end of the current fiscal year.

Among other economic indicators, he said the official rate had fallen from 22 percent to 11.5 percent, while the State Bank’s foreign exchange reserves had exceeded $17 billion.

Aurangzeb said industrial growth stood at 6.1 per cent, while the services sector recorded a growth of 4.1 per cent.

“The productive capacity of industries is continuously increasing,” he said, adding that “big companies of the world are investing in Pakistan.”

Discussing governance reforms, Aurangzeb said the Faceless Customs Assessment System had eliminated direct interaction between importers and tax officials to ensure transparency and improve revenue collection.

He added that 39,000 new companies had been registered with the Securities and Exchange Commission of Pakistan (SECP), reflecting growing business activity.

On financial inclusion, the finance minister said the government had introduced five schemes aimed at providing finance to small borrowers and vulnerable segments of the society.

He highlighted the Rs 7.1 billion Agricultural Storage Financing Fund, under which storage facilities would be set up across the country, allowing farmers to safely store grains and agricultural produce while getting bank financing against stored stocks.

Aurangzeb said the initiative was launched under the special focus of the prime minister and was aimed at accelerating financial inclusion while creating opportunities for skilled and marginalized groups.

He further said that under the Zar Khezi project, loans worth Rs 300 billion were being provided to 750,000 farmers.

The minister also highlighted the progress in the government’s Digital Pakistan agenda and said that a large number of merchants had started adopting digital systems.

“Significant progress has been made on Digital Pakistan and the financial inclusion agenda,” he said, adding that the reforms had resulted in an increase in banking users, rapid growth in digital transactions and a stronger foundation for a cashless economy.

According to Aurangzeb, the number of merchants integrated into the digital payments system increased to 1.67 million from 500,000 the previous year.

He also informed the House that a production monitoring system had been implemented in 27 cement factories and 75 sugar mills.

Regarding demographics and employment, the Finance Minister noted that 68 per cent of Pakistan’s population was below 30 years of age and stressed the need to create opportunities for the youth.

“Funding for youth is the most important program,” he said, stressing that job creation remains a key priority of the government’s economic strategy.

Aurangzeb said the government is focused on equipping Pakistani youth with the necessary skills and opportunities to become active contributors to the economy.

“Our youth are full of skill, determination and spirit of achievement. Prime Minister Muhammad Shehbaz Sharif’s determination is that every young Pakistani is provided with the necessary skills, training and opportunities to become an active player in the national economy,” he said.

The minister said that under the Prime Minister’s Youth Skill Development Programme, implemented through NAVTTC, around 515,000 youth have so far received modern and conventional technical training.

Citing an independent evaluation, it said 53 percent of trained participants had already secured employment.

Aurangzeb added that the program placed special emphasis on economic empowerment of women through IT-based training, enabling them to participate in the digital economy and self-employment sector from their homes.

This story is being updated.