The federal government is expected to present the Budget 2026-27 in Parliament on June 10 or June 12 after key discussions with the International Monetary Fund (IMF) and consultations on fiscal priorities delayed the budget process.
The delay comes after the postponement of the National Economic Council (NEC) meeting, which was originally scheduled for June 3. According to a notification issued by the Cabinet Division, the meeting has been deferred, with a revised date to be announced later.
Initially, the federal budget was expected to be unveiled on June 5, while the Pakistan Economic Survey 2025-26 was scheduled for June 4. However, following a virtual meeting between Pakistani authorities and the IMF, the government decided to revise the budget calendar.
Sources said one of the major reasons behind the delay is the government’s effort to convince provinces to align their development spending with broader national priorities, including increased allocations for defence and security requirements.
Following the 7th National Finance Commission (NFC) Award, provinces have received a significantly larger share of federal resources. For FY2026-27, the combined provincial development budget is estimated at Rs. 3.138 trillion, with Punjab alone proposing a development outlay of Rs. 1.41 trillion.
In comparison, the federal Public Sector Development Programme (PSDP) is expected to remain capped at Rs. 1.126 trillion, prompting discussions on whether provinces should take on a greater role in financing development initiatives and supporting national fiscal objectives.
Another key challenge remains ongoing negotiations with the IMF over revenue measures and expenditure adjustments required to achieve a primary surplus target of 2 percent of GDP, equivalent to approximately Rs. 2.9 trillion in the next fiscal year.
According to officials, the IMF has rejected proposals to lower the Federal Board of Revenue’s (FBR) tax collection target for FY2026-27, maintaining the goal at Rs. 15.264 trillion despite a downward revision in the current fiscal year’s target.
The FBR’s revised tax collection target for FY2025-26 was reduced from Rs. 13.979 trillion to Rs. 13.428 trillion. However, actual collections are now projected to remain close to Rs. 13 trillion by the end of the fiscal year.
This creates a significant challenge for tax authorities, as the FBR will need to generate an additional Rs. 2.264 trillion in revenue during FY2026-27 to meet the IMF-backed target.
Even with projected nominal economic growth of 12.2 percent, based on an estimated 4 percent GDP growth rate and 8.2 percent inflation, officials estimate normal revenue growth would raise tax collections to around Rs. 14.56 trillion. This would still leave a revenue gap of nearly Rs. 700 billion that must be bridged through new taxation measures, improved compliance, or administrative reforms.
Sources also indicated that the upcoming Gilgit-Baltistan legislative elections may have contributed to the delayed budget announcement. However, senior finance officials emphasized that the primary reason remains the government’s efforts to finalize key fiscal targets and secure consensus with the IMF.
With several critical issues still under discussion, the final date for the federal budget presentation remains subject to official confirmation as authorities continue working to finalize the economic framework for FY2026-27.
