Govt unveils Rs18.8tr budget for FY2026-27; GDP growth targeted at 4pc
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Finance Minister Muhammad Aurangzeb presented the FY2026-27 budget in the National Assembly (NA) on Friday, during a session that began two hours late and was marred by loud protests from the opposition. Aurangzeb prefaced the numbers with a note of thanks to leaders of the coalition parties supporting the federal government, as well as a rumination on Pakistan’s improved standing in the world, which he described as a culmination of events that started from last year’s Operation Bunyan-um-Marsoos and which peaked with Pakistan brokering a ceasefire between Iran and the US amidst a dangerous regional escalation. The details The budget presented for fiscal year 2026-27 has an outlay of Rs18.8 trillion, of which Rs8,045bn will be set aside for markup payments, Aurangzeb explained as he introduced the proposals. The finance minister said the economy was expected to grow four per cent in FY2026-27 and average inflation was expected to be recorded at 8.2pc. He added that the fiscal deficit would be 3.6pc of GDP while the primary surplus would 2pc. Tax revenue has been estimated at Rs15,264 for FY-2026-27, which is 17.6pc more than the outgoing year’s Rs12,983. He further said that provinces would contribute RS8,848bn to the federal revenue. He also said that the federal and provincial governments had agreed on a mechanism to meet “some national demands”. “The country will experience the positive impact of this mechanism,” he said, adding that the mechanism was agreed on the basis of “federal cooperativism” and without affecting the constitutional rights of provinces. Under this mechanism, he continued, provinces’ share in the federal divisible pool would remain in accordance with the 7th National Finance Commission award. Reiterating that tax revenue for the coming fiscal year was estimated at Rs15,264bn, he said Rs13,250 would be set aside for “distribution between the federal and provincial governments”. “This amount of Rs15,264bn to Rs13,250 will be available by the pr