Key details of the federal budget for the fiscal year 2025-26 have emerged ahead of its official unveiling, revealing a projected budget deficit of Rs6,501 billion — approximately 5 percent of Pakistan’s gross domestic product (GDP). The federal budget, with a total outlay of Rs17,600 billion, is set to be presented in the National Assembly by the Finance Minister later today.
According to sources familiar with the budget documents, the government has proposed total expenditures of Rs17,573 billion against total federal revenue projections of Rs19,298 billion. After provincial transfers amounting to Rs8,206 billion, the net federal revenue stands at Rs11,072 billion.
The Federal Board of Revenue (FBR) has been assigned a tax collection target of Rs14,131 billion. Non-tax revenue is projected at Rs5,167 billion, showing the government’s push to broaden its revenue base.
Debt servicing is once again the largest expenditure item, with Rs8,207 billion allocated for interest payments. Defence spending follows as the second-largest budget component, with Rs2,550 billion earmarked for national security.
Other key allocations include Rs1,055 billion for pensions, Rs971 billion for civil government operations, Rs1,186 billion for subsidies, and Rs1,928 billion for grants and transfers. The Public Sector Development Programme (PSDP) is set to receive Rs1,000 billion for infrastructure and development projects.
The upcoming fiscal year’s ongoing expenditures are estimated at Rs16,286 billion, reflecting continued pressure from mandatory financial commitments such as debt repayment and pension liabilities, which limit fiscal space for new development initiatives.
As the government prepares to present the federal budget for 2025-26, it is expected to highlight its focus on improving revenue collection and curbing non-essential spending to ensure fiscal sustainability.
