Pakistan's federal government has proposed a PKR 18.771 trillion budget for fiscal year 2026-27, with debt servicing accounting for the single largest share of expenditures.
Budget documents presented ahead of parliamentary debate show total current expenditure at PKR 17.495 trillion, or more than 93% of overall federal spending.
How much of Pakistan's budget goes to debt servicing?
Debt servicing and interest payments have been allocated PKR 8.054 trillion in the FY2026-27 budget, representing nearly 43% of total federal expenditure. Defense affairs and services follow at PKR 3 trillion.
Together, these two categories consume more than half of the entire budget, leaving limited fiscal space for development and public services.
What are the major spending categories in the FY2026-27 budget?
Civil government operations have been allocated PKR 1.071 trillion, while pension expenditures are projected at PKR 1.169 trillion.
Subsidies are estimated at PKR 1.091 trillion, and grants and transfers at PKR 2.68 trillion. Another PKR 430 billion has been set aside for emergency requirements and contingencies.
Development and net lending expenditures are estimated at PKR 1.276 trillion. Of that amount, PKR 1 trillion has been allocated to the federal Public Sector Development Program, while net lending is projected at PKR 276 billion.
What is Pakistan's tax revenue target for FY2026-27?
The Federal Board of Revenue has been assigned a tax collection target of PKR 15.264 trillion for the upcoming fiscal year. Non-tax revenues are expected to generate PKR 5.336 trillion, bringing gross federal revenue receipts to PKR 20.6 trillion.
Under the National Finance Commission Award, provincial governments will receive an estimated PKR 8.848 trillion, leaving net federal revenue receipts at PKR 11.751 trillion.
How does Pakistan plan to finance the budget deficit?
To cover the financing gap, the government plans to raise PKR 7.02 trillion through domestic and external sources. Borrowing through Treasury Bills, Pakistan Investment Bonds, and Sukuk is projected at PKR 4.012 trillion.
Non-bank borrowing, including National Savings Schemes and other public account instruments, is projected at PKR 2.034 trillion.
Net external receipts are estimated at PKR 813 billion. Privatization proceeds are expected to contribute PKR 161 billion during the fiscal year. The proposed budget will be debated in parliament before final approval ahead of the new fiscal year beginning July 1.
Comments
See what people are discussing