The federal government is set to unveil the Budget 2026-27 on June 5, with preliminary estimates suggesting a total outlay of Rs. 17.1 trillion for the upcoming fiscal year.
The budget will be presented before Parliament after approval by the federal cabinet, which is scheduled to meet on the same day. Budget sessions of both the National Assembly and Senate have already been summoned to consider the government’s fiscal proposals for FY2026-27.
Prior to the budget announcement, the government will release the Economic Survey of Pakistan 2025-26 on June 4. The annual report will provide a comprehensive review of the country’s economic performance, including growth trends, inflation, fiscal indicators, and sector-wise developments during the outgoing fiscal year.
According to budget proposals under consideration, the government is targeting economic growth of 4.1 percent in FY2026-27, while average inflation is projected at 8.4 percent.
The proposed fiscal framework sets an ambitious tax collection target of Rs. 15.267 trillion for the Federal Board of Revenue (FBR), alongside projected non-tax revenues of Rs. 2.768 trillion. To support infrastructure and development projects, the government is expected to allocate Rs. 1.1 trillion under the Federal Public Sector Development Programme (PSDP).
Debt servicing will continue to account for the largest share of federal expenditures. The government is expected to earmark Rs. 7.824 trillion for interest payments on domestic and external debt. Defense spending is also projected to rise to Rs. 2.665 trillion in the next fiscal year.
Meanwhile, the government has reportedly set a petroleum levy collection target of Rs. 1.727 trillion, highlighting its growing importance as a source of revenue amid efforts to reduce the fiscal deficit.
The upcoming budget is also expected to address demands for salary and pension increases for government employees. While officials have indicated that relief measures may be linked to inflation, employee representatives are seeking substantial increases, with some groups demanding up to a 100 percent raise in salaries and pensions.
Tensions between the government and public sector employees have intensified ahead of the budget announcement. A coalition of government employees has announced protest demonstrations outside the Ministry of Finance on June 4 and outside Parliament on budget day, urging the government to incorporate their demands into the final budget proposals.
The Budget 2026-27 is being closely watched by businesses, investors, taxpayers, and international stakeholders as Pakistan seeks to strengthen economic growth, improve revenue collection, and maintain fiscal stability in the coming year.
