The federal government is expected to present the FY2026-27 budget in Parliament on either June 10 or June 12, following delays caused by ongoing negotiations with the International Monetary Fund (IMF) and discussions regarding provincial development spending.
The delay comes after the postponement of the National Economic Council (NEC) meeting, which was originally scheduled for June 3. According to a notification issued by the Cabinet Division, the meeting has been deferred, with a revised date yet to be announced.
Initially, the federal budget was expected to be unveiled on June 5, while the Pakistan Economic Survey 2025-26 was scheduled for June 4. However, government officials revised the timeline after a virtual consultation with IMF representatives.
Sources indicate that one of the key reasons behind the postponement is the federal government’s effort to encourage provinces to better align their development spending with national priorities, including increased allocations for defence and security requirements.
Following the implementation of the 7th National Finance Commission (NFC) Award, provinces now receive a significantly larger share of national revenues. For FY2026-27, provincial development budgets are projected to reach Rs. 3.138 trillion, with Punjab alone proposing a development outlay of Rs. 1.41 trillion. In comparison, the federal Public Sector Development Programme (PSDP) has been capped at Rs. 1.126 trillion.
Meanwhile, negotiations with the IMF remain focused on achieving a primary budget surplus target of 2 percent of GDP, equivalent to approximately Rs. 2.9 trillion. Discussions continue over additional revenue measures and expenditure adjustments required to meet this objective.
Officials revealed that the IMF has maintained the Federal Board of Revenue’s (FBR) tax collection target at Rs. 15.264 trillion for FY2026-27, despite a downward revision in the current fiscal year’s target. The revised tax collection target for FY2025-26 now stands at Rs. 13.428 trillion, while actual collections are expected to remain near Rs. 13 trillion.
This creates a significant challenge for tax authorities, who will need to generate an additional Rs. 2.264 trillion in revenue next year to achieve the agreed target.
Even with projected nominal economic growth of 12.2 percent—based on 4 percent real GDP growth and 8.2 percent inflation—estimated tax revenues would reach only around Rs. 14.56 trillion, leaving a shortfall of nearly Rs. 700 billion.
Reports also suggest that the upcoming Gilgit-Baltistan legislative elections may have contributed to the delay. However, finance ministry officials maintain that the primary reason remains the ongoing effort to finalize key fiscal targets and secure agreement with the IMF.
As discussions continue, the government is working to finalize major budgetary figures before formally announcing the FY2026-27 federal budget.
