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Public finance

Pakistan Unveils Rs17.573 Trillion Growth-Oriented Federal Budget for 2025-26 Fiscal Year

Strategic Insights

— 2 min read

The Minister for Finance and Revenue, Senator Muhammad Aurangzeb, unveiled the Rs17.573 trillion growth-oriented federal budget for the fiscal year 2025-26 in the National Assembly, outlining a strategy to promote a competitive economy and increase foreign exchange reserves. The budget sets an annual economic growth target of 4.2% and an inflation rate of 7.5% for the upcoming fiscal year, with the fiscal deficit expected to remain at 3.9% of GDP. The Federal Board of Revenue (FBR) revenues have been targeted at Rs 14,131 billion, with provinces set to receive a share of Rs 8,206 billion out of the total federal revenues.

Key Takeaways:

  • The federal budget for 2025-26 has been set at Rs17.573 trillion, with a target for the Federal Board of Revenue (FBR) revenues of Rs 14,131 billion, representing an 18.7% increase from the ongoing FY24.
  • Provinces are expected to receive a share of Rs 8,206 billion out of the total federal revenues, with the Federal Board of Revenue also setting aside Rs 5,147 billion for federal non-tax revenues.
  • The net revenues of the federal government are expected to be Rs 11,072 billion, with a target for federal government total expenditures set at Rs 17,573 billion, including Rs 8,207 billion for markup payments.
  • The government has proposed to allocate Rs 1000 billion for the annual Public Sector Development Programme (PSDP) and Rs 2,550 billion for defense.
  • For pensions, the government has allocated Rs 1,055 billion, with Rs 1,186 billion set aside for subsidies for power and other sectors, and Rs 1,028 billion allocated for grants to BISP, Azad Jammu and Kashmir, Gilgit Baltistan, and newly merged districts of Khyber Pakhtunkhwa.
  • The government aims to increase the coverage of the flagship initiatives of BISP, increasing the number of beneficiary families to 10 million, with the allocated amount for BISP increased by 21% to Rs 716 billion.

Statistics:

  • Rs 17,573 trillion: Total federal budget for 2025-26
  • 4.2%: Annual economic growth target for the upcoming fiscal year
  • 7.5%: Inflation rate expected during the upcoming fiscal year
  • 3.9%: Fiscal deficit expected as a percentage of GDP
  • 18.7%: Increase in FBR revenues targeted for the upcoming fiscal year compared to the ongoing FY24
  • Rs 14,131 billion: Target for FBR revenues for the upcoming fiscal year
  • Rs 8,206 billion: Share of provinces in total federal revenues
  • Rs 11,072 billion: Net revenues of the federal government
  • Rs 17,573 billion: Total federal government expenditures
  • Rs 1000 billion: Allocation for the annual Public Sector Development Programme (PSDP)
  • Rs 2,550 billion: Allocation for defense
  • Rs 1,055 billion: Allocation for pensions
  • Rs 1,186 billion: Allocation for subsidies for power and other sectors
  • Rs 1,028 billion: Allocation for grants to BISP, Azad Jammu and Kashmir, Gilgit Baltistan, and newly merged districts of Khyber Pakhtunkhwa
  • Rs 716 billion: Increased allocation for BISP by 21%

Sources:

  • "Minister for Finance and Revenue Senator Muhammad Aurangzeb unveils Rs17.573 trillion growth-oriented federal budget for 2025-26 fiscal year", Dawn, Islamabad, 2023

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