Pakistan's development spending reaches PKR 415 billion but trails targets
Pakistan spent PKR 415 billion of its PSDP in nine months, reaching 41.5% of the PKR 1 trillion target
Haris Zamir
Business Editor
Experience of almost 33 years where started the journey of financial journalism from Business Recorder in 1992. From 2006 onwards attached with Television Media worked at Sun Tv, Dawn Tv, Geo Tv and Dunya Tv. During the period also worked as a stringer for Bloomberg for seven years and Dow Jones for five years. Also wrote articles for several highly acclaimed periodicals like the Newsline, Pakistan Gulf Economist and Money Matters (The News publications)
Pakistan has spent nearly half of its annual development budget in the first nine months of the current fiscal year, despite ongoing economic pressures and a shortfall in revenue collection.
Figures from the Ministry of Planning, Development and Special Initiatives show PKR 415 billion was utilized under the Public Sector Development Program (PSDP) between July and March 2025-26.
What is Pakistan's PSDP utilization rate for 2025-26?
Pakistan has utilized 41.5% of its original PKR 1 trillion PSDP allocation in the first nine months of fiscal year 2025-26.
Against the authorized disbursement of PKR 589 billion, actual spending of PKR 415 billion represents a 45.6% execution rate.
Spending has improved slightly compared to 36.4% utilized in the same period last year.
Why was the development budget cut from PKR 1 trillion?
The government initially set the PSDP at PKR 1 trillion but later reduced it by approximately PKR 173 billion. The cut was part of efforts to contain fuel prices and manage inflationary pressures.
This revision brought the effective allocation closer to PKR 827 billion for the year.
Which sectors received the most development spending?
Provinces and special areas were the largest recipients, utilizing around PKR 115 billion in the nine-month period.
The National Highway Authority ranked second with PKR 72 billion in spending, followed by water sector projects at PKR 51 billion.
The Cabinet Division spent about PKR 44 billion against a target of PKR 63 billion, an execution rate of roughly 70%.
How fast is spending on parliamentary schemes?
Spending on development schemes linked to ruling parliamentarians moved at a notably faster pace than other categories. Around 70% of allocations for these schemes were utilized within the nine-month period.
In the fastest-executed segment, nearly 90% of a revised PKR 63.24 billion allocation was authorized, with over PKR 44 billion spent in approximately four months.
Is Pakistan on track with its planned disbursement schedule?
The Ministry of Finance planned to release 15% of PSDP funds in the first quarter, 20% in the second, 25% in the third, and 40% in the final quarter.
By that schedule, roughly 60% of funds should have been released by the end of March. Current spending of 41.5% falls short of that pace, reflecting caution tied to macroeconomic stabilization efforts.
What do economists say about Pakistan's development spending shortfall?
Economists attribute the slower-than-planned PSDP utilization to limited fiscal space and weaker revenue performance.
"Development spending is being squeezed by limited fiscal space and weaker revenue performance," said one analyst, adding that improvement over last year remains modest.
Balancing development investment with fiscal discipline remains a central challenge as Pakistan manages ongoing economic reforms and external financing requirements.
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