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Budget FY26: Govt targets 4.2pc growth, 10pc hike in FBR tax revenue

Upcoming budget is projected at Rs17.6 trillion

Published a year ago on Jun 10th 2025, 5:38 pm

By Web Desk

Budget FY26: Govt targets 4.2pc growth, 10pc hike in FBR tax revenue

Islamabad: Federal Finance Minister Muhammad Aurangzeb is delivering budget speech for the fiscal year 2025-26 in the National Assembly, targeting a modest 4.2 per cent growth for the coming fiscal year, compared to 2.7pc expected in the outgoing FY25.

National Assembly Speaker Sardar Ayaz Sadiq is chairing the budget session.

As soon as the session began after the arrival of Prime Minister Shehbaz Sharif, members from opposition benches started chanting slogans.

The budget was announced with a total outlay of Rs17.6 trillion, down 7 per cent or Rs1.3 trillion as compared to the Rs18.9 trillion budgeted outlay of FY25.

The CPI inflation rate is budgeted to be around 7.5pc in FY26, whereas the budget deficit is expected to be around 3.9pc of the GDP, while the primary surplus is budgeted at 2.4pc of the GDP.

The finaance minister said that Pakistan has now achieved economic stability and was “moving towards a Pakistan that is prosperous”. He claimed that the government had not given any mini budget and no new tax was imposed.

Aurangzeb noted that Pakistan's prestige has risen in the international community, while emphasising the government's renewed focus on economic development through national unity and determination.

The minister highlighted the current account surplus, remittances and the stability of the rupee while also mentioning the positive reports from international credit rating agencies Moody’s and Fitch that upgraded Pakistan’s rating.

Talking about the outgoing fiscal, the minister said that the country achieved a surplus of around 2.4% of the GDP in FY25, whereas the CPI rate declined to 4.7%.

Later, the finance minister will lay a copy of the Finance Bill 2025-26, including the Annual Budget Statement, before the Senate for further consideration.

The Federal Board of Revenue (FBR) revenues have been targeted at Rs 14,131 billion for the upcoming fiscal year, showing an 18.7% increase as compared to the ongoing FY24. Out of the total federal revenues, provinces will get a share of Rs 8,206 billion, he added.

Aurangzeb further said that the target for the federal non-tax revenues had been set at Rs 5,147 billion. The net revenues of the federal government will be Rs 11,072 billion. Target for federal government total expenditures has been set at

Rs 17,573, out of which Rs 8,207 will be used for the markup payments.

The current federal government expenditures are Rs 16,286 billion, the finance minister said, adding that the government has proposed to allocate Rs 1000 billion for the annual Public Sector Development Programme (PSDP).

The finance minister said that in the budget FY26, the government will provide Rs 2,550 billion, and Rs 971 billion for the defence and civil services, respectively.

For pensions, he said an amount of Rs 1,055 billion has been allocated. Similarly, Rs 1,186 billion have been set aside for the subsidies for power and other sectors. Likewise, the government has set aside Rs 1,928 billion in term of grants for BISP, Azad Jammu and Kashmir, Gilgit Baltistan and newly merged districts of Khyber Pakhtunkhwa.

The finance minister underscored that the government is intended to increase the coverage the flagship initiatives of BISP under which the number of beneficiary families will be increased to 10 million. The government has increased the allocated amount for BISP by 21% to Rs 716 billion.

The finance minister said that the government had introduced several measures, due to which the macroeconomic indicators showed resilience.

He said that the government had achieved 2.4 per cent of primary surplus, the inflation rate went down to 4.7 per cent as it was recorded at 29.2 per cent during the last two years.