Rs. 17.1 Trillion Budget to Be Unveiled Next Week: What We Know So Far

The federal government has summoned budget sessions of both the National Assembly and Senate on June 5, when the federal budget for fiscal year 2026-27 is expected to be presented.

A special meeting of the federal cabinet has also been scheduled for the same day to approve the budget proposals before their presentation in parliament.

Ahead of the budget, the government will release the Economic Survey of Pakistan 2025-26 on June 4, providing a detailed overview of the country’s economic performance during the outgoing fiscal year.

According to preliminary budget estimates, the size of the federal budget for FY2026-27 is expected to reach Rs. 17.1 trillion. The government is proposing an economic growth target of 4.1 percent and expects average inflation to remain around 8.4 percent during the next fiscal year.

The proposed budget framework sets a tax revenue target of Rs. 15.267 trillion, while non-tax revenue is projected at Rs. 2.768 trillion. The government is also expected to allocate Rs. 1.1 trillion for the federal Public Sector Development Programme (PSDP).

Debt servicing is projected to remain the largest expenditure item, with Rs. 7.824 trillion proposed for interest payments. Meanwhile, defense spending is expected to increase to Rs. 2.665 trillion. The government has also set a petroleum levy collection target of Rs. 1.727 trillion for the next fiscal year.

The budget preparations come as tensions emerge between the government and public sector employees over salary and pension adjustments. Government officials have indicated that relief may be provided broadly in line with inflation, but employee representatives are demanding increases of up to 100 percent in salaries and pensions.

A coalition of government employees has announced plans to stage protests outside the Ministry of Finance a day before the budget and outside Parliament on budget day. Employee representatives have warned of a wider protest campaign if their charter of demands is not addressed in the final budget proposals.