The federal government’s budget for FY2026-27 is likely to be presented in parliament on June 10 or 12 after a delay caused by unresolved discussions with the International Monetary Fund (IMF) and ongoing efforts to bring provincial development spending in line with national priorities.
The delay followed the postponement of the National Economic Council (NEC) meeting that was scheduled for June 3. According to an official notification issued by the Cabinet Division, the meeting has been postponed and a new date will be announced later.
The budget was originally expected to be presented on June 5, while the Pakistan Economic Survey 2025-26 was scheduled for release on June 4. However, officials decided to revise the schedule after a virtual meeting between Pakistani authorities and the IMF.
Sources said one of the main reasons behind the delay is the federal government’s attempt to persuade provinces to voluntarily align their larger development budgets with broader national requirements, including defence and security-related spending.
After the 7th National Finance Commission Award, the provinces’ share in national resources increased significantly. For FY2026-27, the combined provincial development outlay is projected at Rs. 3.138 trillion, with Punjab alone proposing Rs. 1.41 trillion. In comparison, the federal development budget has been capped at Rs. 1.126 trillion, sparking internal discussions on how provinces can assume greater fiscal responsibility.
Another major hurdle is the lack of agreement with the IMF over revenue measures and expenditure cuts needed to achieve a primary surplus target of 2 percent of GDP, or around Rs. 2.9 trillion in the next fiscal year.
Officials said the IMF has refused to reduce the Federal Board of Revenue’s tax target for FY2026-27, which remains fixed at Rs. 15,264 billion. This is despite a downward revision in the current year’s tax target from Rs. 13,979 billion to Rs. 13,428 billion for the fiscal year ending June 30, 2026.
The challenge for budget planners has become even more difficult as the FBR’s actual tax collection for the outgoing year is now projected to remain around Rs. 13,000 billion. This means the revenue authority will have to generate an additional Rs. 2,264 billion next year to hit the IMF-backed target.
Even with projected nominal economic growth of 12.2 percent, based on 4 percent real GDP growth and 8.2 percent inflation, normal tax collection is expected to reach only around Rs. 14,560 billion. That would still leave a gap of nearly Rs. 700 billion to meet the required target.
According to reports, the Gilgit-Baltistan legislative election may also have played a role in the delayed announcement. Senior finance officials maintained that the main issue was the inability to finalize budget figures both internally and with the IMF.
As a result, the budget date remains subject to final confirmation, with the government still working to settle key fiscal numbers before formally unveiling the 2026-27 budget.
