Islamabad, June 10, 2025 – In a pivotal session of the National Assembly on Tuesday, Federal Minister for Finance and Revenue, Senator Muhammad Aurangzeb, presented the much-anticipated federal budget for the fiscal year 2025–26.
The Rs17.573 trillion budget, he emphasized, is a cornerstone of the government’s long-term economic reform strategy aimed at achieving sustainable growth and macroeconomic stability.
While unveiling the budget, Aurangzeb described it as “growth-oriented and reform-driven,” designed to enhance competitiveness, reduce fiscal and external imbalances, and boost foreign exchange reserves. “This budget marks the beginning of a comprehensive roadmap toward economic revival,” Aurangzeb told the Parliament.
The government has set the GDP growth target at 4.2% for FY2025–26, with inflation expected to be contained at 7.5%. Aurangzeb said the fiscal deficit is projected at 3.9% of GDP, while the primary surplus is targeted at 2.4%, reflecting the government’s focus on fiscal discipline.
Aurangzeb announced that the Federal Board of Revenue (FBR) has been tasked with collecting Rs14,131 billion in tax revenues, a robust 18.7% increase compared to FY2024. Out of the total federal revenues, Rs8,206 billion will be transferred to the provinces under the NFC Award.
In terms of budget expenditures, the federal government’s net revenues are expected to reach Rs11,072 billion. Aurangzeb confirmed that Rs8,207 billion has been allocated solely for interest payments. Total current expenditures have been estimated at Rs16,286 billion, while Rs1,000 billion is earmarked for the Public Sector Development Programme (PSDP).
Key budget allocations include Rs2,550 billion for defence and Rs971 billion for civil administration. An amount of Rs1,055 billion is reserved for pensions, while Rs1,186 billion will be spent on subsidies, especially in the energy sector. Aurangzeb also announced Rs1,928 billion in grants for BISP, AJK, Gilgit-Baltistan, and the merged districts of Khyber Pakhtunkhwa.
Significantly, the finance minister revealed an enhanced allocation of Rs716 billion for BISP, a 21% increase, aiming to expand the program’s coverage to 10 million families.
Aurangzeb emphasized that recent economic measures have yielded positive results. Inflation dropped to 4.7%—a stark contrast to the 29.2% recorded two years ago. He also noted a turnaround in external accounts, citing a projected current account surplus of $1.5 billion, compared to a $1.7 billion deficit last year.
In closing, Aurangzeb reiterated that this budget lays the foundation for a stronger, more resilient economy, and represents a clear step forward in Pakistan’s fiscal consolidation and reform agenda.