The Pakistan Banks Association (PBA) has welcomed the Federal Budget for FY 2026–27, describing it as a shift from crisis management toward a more growth-oriented economic approach while still maintaining fiscal discipline.
According to the PBA, the budget reflects a balanced strategy that keeps the fiscal deficit at 3.6% of GDP and maintains a primary surplus of 2%, while also introducing tax relief measures for individuals and businesses. These include reductions in personal income tax, a cut in super tax for parts of the corporate sector, export incentives, and an extension of concessional tax treatment for IT and IT-enabled services until 2029.
The banking industry said Pakistan is currently operating in its strongest macroeconomic position in over a decade, supported by lower policy rates, a restored primary surplus, and recent credit rating upgrades from global agencies including Moody’s, Fitch, and S&P. In this environment, banks say they are prepared to expand lending not only to the government but also to the broader economy.
The PBA highlighted the sector’s recent contributions to economic restructuring, including the resolution of Rs 1.225 trillion in power sector circular debt, restructuring of Rs 268 billion in Pakistan International Airlines (PIA) debt ahead of privatization efforts, and reductions in export financing costs to support competitiveness.
Looking ahead, the association outlined ambitious targets for 2028, including increasing SME financing from Rs 882 billion to Rs 1.5 trillion, expanding housing finance to support 500,000 housing units, and raising agriculture financing to over Rs 3.5 trillion annually. It also emphasized plans to strengthen investment in education, skills development, and social impact sectors.
PBA Chairman Zafar Masud said the budget creates strong conditions for priority-sector lending and pledged that banks will play a key role in driving economic growth through expanded credit to SMEs, housing, agriculture, exports, and technology sectors. He also stressed the need for a stable tax regime, improved documentation, and risk-sharing mechanisms to support sustainable lending.
CEO and Secretary General Muneer Kamal added that the industry is ready to support the shift from stabilization to growth, ensuring continued credit flow to productive sectors, particularly SMEs, which are expected to drive job creation.
The association also noted recent financial indicators such as record remittances of $38.3 billion, over $12 billion flowing through Roshan Digital Accounts, and a banking network serving more than 100 million depositors. Overall, the PBA said the sector is well-capitalized and positioned to support Pakistan’s next phase of economic expansion.
