Govt likely to assign Rs2.34t for defence next year: Report

Islamabad: The Ministry of Finance (MoF) has unveiled its Medium-Term Macroeconomic Framework, projecting a favourable economic outlook for the upcoming fiscal year, with expectations of increased economic growth and reduced inflation.

According to a private news channel,  the Finance Ministry in its report stated that the Gross Domestic Product (GDP) growth is anticipated to reach 4.8% for the fiscal year 2025-26. In addition to this growth, inflation is expected to decline from the current 12% to 7.5% in the coming year.

The Federal Board of Revenue (FBR) is projected to see its tax revenue increase to Rs15,555 billion. Non-tax revenue collection is estimated to reach Rs3,851 billion, while the petroleum levy is expected to generate Rs1,388 billion from consumers.

Despite these positive developments, the ministry forecasts a significant financial deficit of Rs9,655 billion. The interest bill on loans is projected to exceed Rs10,000 billion, with a total expenditure of Rs10,283 billion allocated for loan interest.

On the external front, the report anticipates exports to total $37.95 billion and remittances to reach $31.70 billion in the next fiscal year. The pension bill is expected to rise to Rs1,166 billion, while civil affairs expenses are projected to be Rs881 billion.

In terms of defence and development, the government plans to allocate Rs2,337 billion for defence expenditures and Rs1,480 billion for development projects.

This economic framework outlines a strategic approach to managing fiscal policies and development priorities, aiming to foster economic stability and growth while addressing budgetary challenges.