Pakistan is considering a national development outlay exceeding Rs. 4 trillion for FY2026-27 as policymakers finalize economic targets and spending plans ahead of the federal budget.
Under the proposed framework, the government is targeting economic growth of 4 percent in FY2026-27, while inflation measured through the Consumer Price Index (CPI) is projected at 8.2 percent.
The National Economic Council, the country’s highest economic planning body, is expected to meet on June 3 under the chairmanship of Prime Minister Shehbaz Sharif to approve the macroeconomic targets and national development program before the federal budget is unveiled.
According to the proposals, the federal Public Sector Development Programme (PSDP) is expected to be allocated Rs. 1.126 trillion. Meanwhile, provincial Annual Development Programmes (ADPs) are projected at around Rs. 3 trillion.
Combined federal and provincial development spending would therefore exceed Rs. 4 trillion, making it one of the largest development outlays in Pakistan’s history. The development budget will finance infrastructure, energy, water, transport, education, health, and other public-sector projects aimed at supporting economic growth and improving public services.
The proposed growth target of 4 percent would represent an improvement from the current fiscal year’s estimated economic expansion, reflecting expectations of a gradual recovery supported by lower inflation, easing interest rates, and increased development spending. The discussions come as the government prepares the FY2026-27 budget, which is expected to focus on balancing growth objectives with fiscal consolidation commitments agreed with the International Monetary Fund (IMF).
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