Pakistan Increases Defence Spending Amid Regional Tensions
Pakistan’s Finance Minister, Muhammad Aurangzeb, unveiled the federal budget for the fiscal year 2025-26 on June 10, revealing a significant boost in defence expenditure. The country has allocated PKR 2,550 billion (approximately US$9 billion) for defence – marking a rise of over 20% compared to the previous fiscal year.
A Strategic Response Following Operation Sindoor
This hefty increase arrives just a month after Operation Sindoor intensified conflict along the border, causing substantial damage to Pakistan’s military infrastructure. Minister Aurangzeb acknowledged the prevailing tensions with India in his speech, remarking, "This budget comes at a historic moment as the nation moves forward through challenging times, showcasing unity and unwavering determination.”
Broader Budget Overview
The overall budget for FY 2025-26 stands at PKR 17.573 trillion (around US$62 billion), reflecting a 6.9% decrease from the prior year’s allocations. This figure encompasses all governmental expenditures and net lending.
Defence Spending in Context
- Last year, defence outlays amounted to PKR 2.1 trillion (US$7.45 billion), including roughly US$2 billion designated for military equipment and assets.
- Additional funds of PKR 563 billion (US$1.99 billion) were reserved for military pensions, which are accounted for separately from the official defence budget.
The current budgetary hike underlines Islamabad’s focus on strengthening its defence capabilities amid ongoing regional disputes.
What Lies Ahead?
As Pakistan navigates complex geopolitical challenges, the increased defence budget underscores a commitment to safeguarding national security while balancing economic constraints.
