Pakistan Unveils Balanced FY26 Budget Amidst Global Pressures

🧾 FY26 Pakistan Budget in Brief

  • Pakistan’s FY26 budget focuses on economic stabilization, tax reforms, and social welfare, aiming to balance growth with IMF commitments. Here’s what you need to know:

    1. Tax Revenues & Fiscal Targets

    • Total budget: ~PKR 18.9 trillion (up ~25% from FY25).

    • Tax revenue target: PKR 12.97 trillion (broadened tax base, stricter enforcement).

    • New taxes: Potential hikes for non-filers, luxury goods, and high-income earners.

    2. Subsidies & Social Spending

    • Benazir Income Support (BISP): Expanded to PKR 600+ billion for low-income families.

    • Energy subsidies: Targeted reductions to curb circular debt.

    • Health/Education: Increased allocations for critical infrastructure.

    3. Economic Growth & Debt Management

    • GDP growth target: 3.6–4.1% (agriculture/IT emphasis).

    • Debt servicing: PKR 9.5 trillion (challenge amid high interest rates).

    4. Sectoral Allocations

    • Infrastructure: CPEC projects prioritized.

    • Agriculture: Tax breaks for fertilizers, seeds, and machinery.

    • Digital Economy: Incentives for freelancers and startups.

    5. Controversies & Challenges

    • Inflation concerns due to proposed taxes.

    • Privatization of state-owned enterprises (e.g., PIA, DISCOs).

    Bottom Line: The FY26 budget tightens fiscal discipline while attempting relief for vulnerable groups—success hinges on implementation.

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