Pakistan intends to reveal its federal budget for the next fiscal year later today, Tuesday, at a time looking to advance the wheel of development while providing the necessary resources for the expected increase in defense spending in the wake of its confrontation with India last month.
Islamabad will also have to maintain its discipline in the International Monetary Fund program in light of the fog for the new commercial customs duties imposed by the United States, its largest export market.
Expected
Media reports are likely that the government provides a budget of 17.6 trillion rupee (62.45 billion dollars) for the fiscal year that begins on the first of next July, a decrease of 6.7% from the current fiscal year.
According to reports, the government expects a financial deficit of 4.8% of GDP, compared to a 5.9% targeted deficit in 2024-2025.
Analysts expected an increase of about 20% in the defense budget, and it is likely to be met by discounts in development spending.
Pakistan has allocated 2.1 trillion rupee ($ 7.45 billion) for defense in the current fiscal year, including two billion dollars to equipment and other assets, and an additional 563 billion rupees ($ 1.99 billion) were allocated to the salaries of military retirement, which are not counted within the official defense budget.
Defense spending was determined by India in the fiscal year 2025-2026 (starting in April and ending in March) with an amount of 78.7 billion dollars, an increase of 9.5% over the previous year, and retirement funds include $ 21 billion for equipment, and said that it will raise spending in the wake of the conflict with Pakistan in May.
Growth expectations
In a related context, the annual survey of the economic performance issued by the Pakistani government yesterday concluded that the country’s economy will likely grow 2.7% in the year ending in June 2025 compared to 2.5% growth in the previous fiscal year.
The government was initially aimed at growth in GDP 3.6% for the current fiscal year, but it reduced this goal to 2.7% last month, and the International Monetary Fund expects 2.6% growth in the current fiscal year, followed by a growth of 3.6% in the following year.
The government of Prime Minister Shahbaz Sharif aims to achieve the growth of 4.2% in the coming fiscal year in the midst of conflicts in priorities that include stimulating investments and maintaining a preliminary surplus and defense spending management amid tension with India.
Finance Minister Mohamed Orenquet said he did not want the economy to expand very quickly, which in the past has led to a significant increase in imports.
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