8/June/2025

Discover the key highlights of Pakistan’s Budget 2025–26. From tax reforms to development spending and from defense to education health, here’s how the government plans to steer the economy amid growing challenges.

Pakistan Budget 2025-26 latest information

Pakistan’s Federal Budget 2025–26 has been officially presented in the National Assembly, and will be announced on June 10, 2025. and it carries significant economic and political weight. With the country emerging from a period of economic stress, high inflation, and currency depreciation, this year’s budget has been termed a “bold and balanced” attempt to revive growth, stabilize public finances, and provide relief to ordinary citizens and a common man.

Let’s dive into the major takeaways from this year’s budget and understand in detailed about the pakistan budget 2025-26 and how it affects Pakistan’s economy and its people.

Table of Contents

Key Facts of the Pakistan Budget 2025–26

Total Budget Outlay:
The government has announced a total budget outlay of PKR 18.9 trillion, which marks a substantial increase from previous budget of 2024-25 it was 15.1 trillion PKR. This expansion reflects the growing fiscal needs of the country and rising costs of governance.
Tax Revenue Target:
In the budget speech for Fiscal Year 2025–26 presented by Finance Minister Muhammad Aurangzeb, the government of Pakistan set a tax revenue target of PKR 12.4 trillion for the Federal Board of Revenue (FBR) which is nearly 22% increase from last year. New measures to expand the tax base include digital tracking of transactions and greater scrutiny of undocumented businesses.
Public Sector Development Programme (PSDP):
A budget of PKR 1.5 trillion has been allocated for PSDP to boost infrastructure, energy, and education projects across all stats of Pakistan. This is in line with the government’s commitment to long-term economic growth.
Education & Health: PKR 790 billion allocated for education, 7x increase from PKR 103 billion in 2024–25. so it is a positive initiative. PKR 600 billion allocated for health as reported by government officials and estimates .This includes spending on hospitals, health insurance, disease prevention, and UHC (Universal Health Coverage)
Defense and Security: Defense spending has been increased to PKR 2.1 trillion, citing regional tensions and internal security concerns. specially the recently pakistan india armed clashes

Subsidies and Social Protection:
A major relief package worth PKR 1.2 trillion has been announced under the Benazir Income Support Programme (BISP) and utility subsidies. This aims to support low-income families amid rising inflation. Previous year 2024, the budget of BISP were PKR 716 billion.

benazer-BISP.
Salaries and Pensions:
Government employees will receive a 15% increase in salaries and 17.5% raise in pensions, which is a welcome move for the middle class.

Strategic Focus: Economic Stability and Growth:

Finance Minister Muhammad Aurangzeb, in his budget speech, emphasized that the government is working with the International Monitory Fund IMF and friendly countries to ensure macroeconomic stability. This budget focuses on reducing the fiscal deficit, increasing exports, and attracting foreign direct investment (FDI).

As discussed in our in-depth analysis A Bold Budget of Pakistan 2025–26: For Public Relief and Growth, this year’s budget shows signs of cautious optimism — especially in social sector investments and infrastructure.

Pakistan’s Economic Outlook is Improving:

The budget comes at a time when Pakistan’s economy is beginning to stabilize. According to the Planning Commission, the country’s GDP has now crossed $400 billion, with GDP per capita increasing to $1,824. This marks a significant recovery compared to previous years.

To understand this in more detail, read our latest report on Pakistan’s Economic Rise: GDP Hits $400 Billion which highlights how policy reforms, improved exports, and remittance flows have contributed to this economic comeback.

Challenges Ahead

Despite some positive signs, challenges remain:

Debt servicing continues to eat up a large chunk of revenue.
Inflation still hovers above 20%, affecting purchasing power.
The government must balance between public relief and fiscal discipline to avoid another economic crisis.

Additionally, political instability and upcoming elections may affect how effectively this budget is implemented.

Conclusion:

The Pakistan Budget 2025–26 reflects a strategic shift toward economic stabilization, growth, and social welfare. With a record PKR 18.9 trillion outlay, increased tax collection goals, and substantial funding for development, defense, and relief programs, the budget is a mix of ambition and realism. While inflation and debt remain pressing challenges, the inclusion of social safety nets like BISP and the boost in salaries/pensions show the government’s intent to support the common citizen.

As Pakistan navigates through a complex economic environment, this budget lays the groundwork for reform, investment, and inclusive growth — if implemented effectively.

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FAQs)

Q1: What is the total size of the Pakistan Budget 2025–26?
A: The total outlay of the federal budget is PKR 18.9 trillion, up from PKR 15.1 trillion in the previous year.

Q2: What is the tax revenue target for FY 2025–26?
A: The government has set a tax revenue target of PKR 12.4 trillion for the FBR, which is a 22% increase from last year.

Q3: What relief has been announced for the public?
A: Key relief measures include a 15% salary increase for government employees, a 17.5% pension raise, and PKR 1.2 trillion in subsidies under the Benazir Income Support Programme (BISP).

Q4: How much is allocated for defense in this budget?
A: The defense budget has been increased to PKR 2.1 trillion, citing regional security concerns and recent military tensions with India.

Q5: Is Pakistan’s economy improving in 2025?
A: Yes, Pakistan’s GDP has surpassed $400 billion, with GDP per capita rising to $1,824, indicating a gradual economic recovery.

Pakistan Budget 2025–26: A Bold Step Toward Economic Revival and Public Relief