Pakistan Prepares to Unveil Rs 17.6 Trillion Budget with Increased Defence Spending
Pakistan is gearing up to announce its federal budget for the fiscal year 2025-26, with indications pointing toward a significant rise in defence expenditure. The total budget size is projected at Rs 17.6 trillion, reflecting the government’s focus on addressing growing security challenges.
Finance Minister to Present Budget Bill
The Finance Minister, Muhammad Aurangzeb, is slated to present the budget as a finance bill in the National Assembly, laying out ambitious targets for revenue, growth, and inflation control. The government aims to hit a record revenue collection close to Rs 14 trillion, marking a robust 22% increase over last year’s projections.
Key Economic Targets for 2025-26
- GDP growth is targeted at 4.2%
- Inflation expected to be capped at 7.5%
- Tax-to-GDP ratio projected at 12.3%, though still short of the ideal 14%
Defence Spending: The Budget’s Centerpiece
At the heart of this budget lies a notable hike in defence spending, anticipated to gain broad bipartisan support in the wake of escalating border tensions. Recent confrontations, including the tragic terror attack in Pahalgam on April 22 and subsequent military strikes by India on terror camps inside Pakistan and Pakistan-occupied Kashmir, have heightened security concerns.
The brief but intense four-day hostilities that followed concluded with a mutual agreement to cease military actions on May 10, following talks between the military leadership of both countries. Despite no official announcement yet, it is widely expected that defence allocation will rise by around 18%, surpassing Rs 2.5 trillion.
Political Consensus on Defence Budget Increase
Leading political parties, including the Pakistan Peoples Party (PPP) and Pakistan Muslim League-Nawaz (PML-N), have reportedly endorsed this hike during budget deliberations, acknowledging the pressing security landscape.
For context, the last fiscal year’s defence budget stood at Rs 2,122 billion, already reflecting a near 15% increase from the previous year. The defence sector remains Pakistan’s second-largest expenditure after debt servicing, which accounted for a staggering Rs 9,700 billion in the current fiscal year.
Balancing Growth and Security in Tough Times
This budget symbolizes Pakistan’s challenge to balance economic recovery with growing defence needs—a delicate act of securing the nation while fostering development. As Finance Minister Aurangzeb presents the detailed proposal, the focus will be on navigating inflationary pressures, boosting revenue, and supporting national security.
With the fiscal blueprint expected imminently, eyes will be on how these allocations reshape the country’s priorities in an increasingly volatile regional environment.
