Pakistan's finance minister presents country's next budget

June 13, 2026 - 06:39

Pakistan's finance minister presented the country's next federal budget to lawmakers on Friday, outlining a spending plan that significantly boosts military funding while cutting back on development projects. The draft budget proposes an 18% increase in defense spending, a move that reflects the government's focus on national security amid ongoing regional tensions and internal challenges.

At the same time, the budget reduces allocations for development programs, which are critical for infrastructure, poverty reduction, and long-term economic growth. This cut has raised concerns among economists and opposition members who argue that it could slow down the country's recovery from a prolonged economic crisis.

On a positive note for the middle class, the budget includes modest tax relief for salaried workers. The government has adjusted income tax slabs to lower the burden on employees earning fixed wages, a group that has faced rising inflation and stagnant purchasing power. However, the overall tax revenue target has been set higher, with new measures aimed at broadening the tax base and bringing more sectors into the formal economy.

The budget also projects a fiscal deficit target that the government hopes will satisfy conditions set by the International Monetary Fund for continued financial support. Pakistan is navigating a difficult period of high debt, currency depreciation, and energy shortages. The finance minister described the budget as a balancing act between security needs, economic stability, and social welfare. Debate on the budget is expected to continue in parliament over the coming weeks before a final vote.