Pakistan’s federal budget for fiscal year 2026-27 has been estimated at Rs. 18.771 trillion, with the government relying on a sizable provincial surplus to contain the overall fiscal deficit and meet key IMF targets.
42 percent of it will be spent on debt servicing.
According to budget documents, the federal government has projected a budget deficit of Rs. 7.02 trillion for the upcoming fiscal year. However, provinces are expected to generate a combined surplus of Rs. 1.794 trillion, which will reduce the consolidated fiscal deficit to Rs. 5.226 trillion.
The Ministry of Finance estimates that the overall fiscal deficit will stand at 3.6 percent of GDP in FY2026-27. The country’s nominal GDP has been projected at Rs. 143.604 trillion for the next fiscal year.
The government has also projected a primary surplus of Rs. 2.828 trillion, equivalent to 2 percent of GDP, in line with a key condition of Pakistan’s IMF program.
On the revenue side, the Federal Board of Revenue (FBR) has been assigned a tax collection target of Rs. 15.264 trillion for FY2026-27. Non-tax revenues are expected to contribute another Rs. 5.336 trillion, taking gross federal revenues to Rs. 20.6 trillion.
After transferring Rs. 8.848 trillion to provinces under the NFC Award, the federal government’s net revenue receipts are estimated at Rs. 11.751 trillion.
To finance the budget, the government plans to raise Rs. 4.012 trillion through treasury bills, Pakistan Investment Bonds (PIBs), and Sukuk. Privatization proceeds are estimated at Rs. 161 billion during the fiscal year.
On the expenditure side, pension payments are projected at Rs. 1.169 trillion, while defense spending has been proposed at Rs. 3 trillion. The government has earmarked Rs. 1.091 trillion for subsidies and Rs. 1.071 trillion for civil government operations.
An allocation of Rs. 430 billion has also been proposed for emergency-related expenditures and contingencies.
The budget figures underscore the government’s efforts to balance fiscal consolidation with spending commitments while adhering to IMF-backed targets for deficit reduction and primary surplus generation.