IMF agrees to Pakistan increasing defense budget

The International Monetary Fund (IMF) has agreed to Pakistan increasing its defense budget after government officials convinced the international lender that defense requirements are bound to rise following the recent conflict with India, officials familiar with the discussions told Nukta.

The increase is seen as a necessary step to strengthen national security in the face of prevailing security threats, the officials said.

The Pakistan government and the IMF have been holding virtual discussions on the budget for fiscal year 2025-26.

While the amount to be allocated has not been confirmed, it will likely be around PKR 2,600 billion, according to the officials.

The amount allocated for defense in the previous budget was PKR 2,122 billion — a mere 11% of the total budget amounting to PKR 18,877 billion.

In the nine months of the current fiscal year, defense expenditure went up by 16.4% to reach PKR 1,423 billion as compared with PKR 1,222 billion during the same period last year, according to data posted on the Ministry of Finance's website.

In the fiscal year ended June 30, 2024, defense spending amounted to PKR 1,858 billion, according to the data.

In the IMF's country report on Pakistan released last month, which was prepared before the Pakistan-India conflict, the Fund projected that defense spending would be around PKR 2,414 billion in FY26 and PKR 2,681 in FY27.