- The federal government has unveiled the proposed budget targets for the upcoming fiscal year.
- It aims for 4% economic growth while keeping average inflation capped at 8.2%.
- Government is setting a massive tax collection target and counting on strong remittances.
- A major chunk of the budget will be swallowed by old debt payments and defense.
The federal government has finalized its budget proposals for the upcoming fiscal year 2026-27. With a total outlay of Rs17.5 trillion, the plan tries to kickstart economic growth and create jobs while operating under tight discipline from the International Monetary Fund (IMF).
The new budget sets a GDP growth target of 4% and aims to keep average inflation down to 8.2%. The national savings target is set at 14.3%, while the investment target is 15%.
Big Spending and Massive Debt Costs
The federal government has laid out exactly where the incoming money will go:
| Total Budget Size | Rs 17.5 trillion |
| FBR Tax Target | Rs 15,267 billion |
| Debt Servicing (Interest) | Rs 7,824 billion |
| Defense Budget | Around Rs 3,000 billion |
| Federal Development (PSDP) | Rs 1,000 billion |
| Non-Tax Revenue | Rs 2,768 billion |
| Petroleum Levy Target | Rs 1,727 billion |
The plan targets a recovery across major local sectors. It aims for growth in the following sectors:
- Large-scale manufacturing: 5%
- Services: 2%
- Industry: 4%
- Agriculture: 8%
Trade Gaps and the 2 Million Jobs Promise
The trade numbers show that the country will still rely heavily on imports to keep running. Total imports are projected at $83.78 billion (with goods making up $70 billion), while total exports are targeted at $44.13 billion (with goods making up $32.8 billion). This leaves a big trade deficit of $37 billion.
To handle this gap, the government is aiming for $42.38 billion in overseas remittances, keeping the current account deficit limited to $3.6 billion.
To ease public pressure, the budget aims to create 2 million new jobs, split across three areas:
- Services Sector: 1.1 million jobs
- Industrial Sector: 500,000 jobs
- Agriculture Sector: 400,000 jobs
Breakdown of the Development Budget
The government is putting the most PSDP amount into road infrastructure and energy projects:
| Sector / Authority | Proposed Fund Allocation (in PKR) |
| State-Owned Enterprises (SOEs) | 451 billion |
| Transport & Communication | 356 billion |
| Corporations | 313 billion |
| National Highway Authority (NHA) | 224.5 billion |
| Social Sector | 180 billion |
| Water Resources | 103 billion |
| Power Division | 88 billion |
| Special Areas Development | 88.8 billion |
| Higher Education Commission (HEC) | 46 billion |
| Science & IT | 41.4 billion |
| Federal Education | 36 billion |
| Health Sector | 22.1 billion |
| CPEC Phase II | 1 billion |
