Prime Minister Shehbaz Sharif is set to chair a meeting of the National Economic Council (NEC) today, where the government is expected to approve the country’s development outlay and key macroeconomic targets for Budget 2026-27.
The NEC, Pakistan’s top constitutional forum for economic decision-making, will review a proposed national development outlay of Rs. 4.5 trillion along with the economic framework for the next fiscal year. The meeting will be attended by the chief ministers of all four provinces, federal ministers, and senior government officials.
According to the proposed breakup, Rs. 1.126 trillion will be allocated for the federal Public Sector Development Programme (PSDP), Rs. 3.138 trillion for provincial development programs, and around Rs. 450 billion for federal state-owned enterprises.
The meeting comes after the federal budget was delayed twice due to difficulties in building consensus among coalition partners and persuading provinces to keep their share under the National Finance Commission (NFC) Award at the outgoing year’s level. To address the issue, the coalition government has reportedly agreed to form technical committees to work out a mechanism for securing around Rs. 1.2 trillion from the provinces without triggering political friction.
Alongside development allocations, the NEC is also expected to sign off on major economic targets for FY2026-27. The government is proposing a GDP growth target of 4 percent for the next fiscal year after growth remained below expectations in the outgoing year.
The council will also review public-sector investment patterns, progress on major infrastructure and development schemes, and monitoring reports on mega projects across the country.
Planning Minister Ahsan Iqbal is expected to give a detailed presentation covering development spending, economic performance, provincial indicators, and future investment priorities. He is also likely to highlight growing pressure on the PSDP, with the total throw-forward of federal development projects reportedly reaching Rs. 10.8 trillion. At the current pace of allocations, completion of this pipeline could take nearly a decade, even without adding new schemes.
Officials are also expected to discuss structural issues in development spending, including the fact that the PSDP currently accounts for only about 5 percent of the total federal budget, while a large majority of projects continue to face cost escalations and delays.
On the revenue side, the government is also examining possible reductions in additional customs duty and regulatory duty on a range of imported consumer goods. These include cosmetics, perfumes, branded clothing, footwear, and personal care items, with proposed cuts ranging from 2 percent to 5 percent.
The review also covers imported dental cosmetic products, artificial hair, and several eye makeup items. These changes are being considered as part of the government’s wider tariff rationalization plan, which aims to gradually simplify Pakistan’s import duty structure in line with economic reform commitments under the IMF program.
