The federal cabinet has approved a 7 percent increase in salaries for government employees as part of the 2026-27 federal budget.
The approval was granted during a cabinet meeting chaired by Prime Minister Shehbaz Sharif at Parliament House, where members also approved the budget documents and the Finance Bill for the upcoming fiscal year.
According to sources, the salary increase will be implemented in two phases, with employees in Grades 1 to 16 expected to receive a higher raise than those in higher grades.
Addressing the cabinet meeting, the prime minister said the government was presenting its third budget and expressed hope that it would help accelerate economic growth despite ongoing challenges.
He said inflation had fallen from 38 percent to single digits, although recent developments in the region had contributed to a slight increase in prices.
The prime minister acknowledged the financial difficulties faced by citizens and thanked the public for their patience during the period of high inflation.