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Islamabad on Friday proposed an 18.77 trillion (USD 67.49 billion) annual budget for the fiscal year, marking an increase of Rs 3 trillion from the previous year’s outlay
Islamabad proposes an 18.77 trillion (USD 67.49 billion) annual budget for the fiscal year (Representative image credit: Reuters)
Pakistan has raised its defence spending by around 18 per cent, limiting development spending, as the country seeks to enhance its military preparedness while trying to keep its International Monetary Fund (IMF) programme on track.
Islamabad on Friday proposed an 18.77 trillion (USD 67.49 billion) annual budget for the fiscal year starting July 2026marking an increase of Rs 3 trillion from the previous year’s outlay.
Finance Minister Muhammad Aurangzeb told the Parliament that the government would allocate Rs 3 trillion for defence in the fiscal year — an 18 per cent hike against the previous year — setting aside federal development spending at Rs 1 trillion.
“Defence spending has been increased considerably to make the country invincible due to the uncertainty in the region,” Aurangzeb stated.
Sources told CNN-News18 that the country’s military had sought a much sharper increase of nearly 20-25 per cent, citing continued hostilities in the region, including conflicts with India and Pakistan.
The budget allocation reflects Islamabad’s delicate balancing act between debt payments and IMF targets, while simultaneously managing development spending and middle-class incomes.
The government has set a tax revenue target of Rs 15.26 trillion for the upcoming fiscal year, an 8.2 per cent increase from Rs 14.13 trillion in the previous year.
A Year After ‘Operation Sindoor’
The increase in Pakistan’s defence spending comes as the country continues to face battles on multiple fronts, including the last year’s military confrontation with India and the ongoing conflict with Afghanistan.
In retaliation for the Pahalgam terror attack — which killed 26 people — India launched ‘Operation Sindoor’, killing over 100 terrorists and destroying nine terror camps in Pakistan’s Punjab province and Pak-occupied-Kashmir (PoK).
The budget, delayed by a week, also comes as Pakistan continues to grapple with mounting energy prices in the wake of U.S.-Israeli war on Iran and the subsequent closure of the Strait of Hormuz.
Pakistan has also sought to keep a USD 7 billion IMF programme on track, aiming to target a primary budget surplus of 2 per cent of GDP for the coming fiscal year.
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