NEC approves development budget, sets 4% growth, 8.2% inflation target
Why this matters: local context for readers following news across Pakistan and the region.
Pakistan’s National Economic Council has approved Rs 3,669 billion for the federal and provincial development programmes, while setting a target of 4% economic growth and 8.2% inflation for the upcoming fiscal year. In a meeting of the NEC chaired by Prime Minister Shehbaz Sharif, the federal and provincial governments agreed to reduce their ADPs by Rs 1,046 billion in view of the current economic situation. For the next fiscal year, the federal development budget has been reduced by Rs 126 billion and set at Rs 1,000 billion, while provinces have agreed to cut their development spending by Rs 920 billion. Addressing the NEC meeting in Islamabad after multiple delays, PM Shehbaz Sharif said Pakistan must introduce incentives to accelerate economic growth. He said Pakistan has achieved macroeconomic stability, but it is now necessary to boost growth to create jobs, increase production, and expand exports. The PM stated that despite ongoing geopolitical tensions in the region, Pakistan has succeeded in meeting IMF conditions. He said the federal government had been consulting provinces on the budget for several weeks, stressing the need for coordination between the federation and the provinces. Sindh Chief Minister Murad Ali Shah, Khyber Pakhtunkhwa CM Sohail Afridi, and Balochistan CM Sarfraz Bugti attended the meeting. Punjab CM Maryam Nawaz was unable to attend the sitting due to illness. After the meeting, Planning Commission officials told the media that the federal and provincial governments have decided not to launch any new development projects in the upcoming fiscal year. They said that apart from projects related to defence, security, and national safety, no new schemes will be initiated next year. According to the Planning Commission, Punjab’s development budget has been set at Rs 749 billion, Sindh’s at Rs 706 billion, Khyber Pakhtunkhwa’s at Rs 455 billion, while Balochistan will spend Rs 308 billion on development projects. All three provinces have reduc