Pakistan's FY 2026-27 federal budget to focus on growth: finance minister

ISLAMABAD, June 13 (Xinhua) -- Pakistan's Finance Minister Muhammad Aurangzeb said on Saturday that the federal budget of 18.771 trillion rupees (about 66.5 billion U.S. dollars) for the fiscal year 2026-27 (July 2026 to June 2027) would aim at sustaining economic recovery, boosting development spending, strengthening national defense and providing targeted tax relief.

At a media briefing, the minister said the budget presented by him in the parliament on Friday focused on maintaining macroeconomic stability while accelerating growth and investment, projecting economic growth at 4 percent and average inflation at 8.2 percent for the next fiscal year.

Aurangzeb described national defence as a top priority, citing evolving regional challenges.

The government has set a tax collection target of 15.264 trillion rupees, while non-tax revenue is projected at 5.336 trillion rupees.

According to the minister, more than 60 percent of federal development spending will be directed toward transport, water and energy projects, with additional allocations for information technology, agriculture, health and education.

The government also announced plans to build 150,000 affordable, climate-resilient housing units and develop digital master plans for 10 major cities, said the minister.

The government proposed reducing property transaction taxes, lowering the tax burden on exporters and cutting the withholding tax on international debit and credit card transactions from 5 percent to 0.5 percent. It also announced the removal of capital value tax on foreign assets held by Pakistanis.

Federal employees and pensioners are set to receive a 7 percent increase in salaries and pensions, while the minimum monthly wage is proposed to rise by 10 percent.

To support agriculture and entrepreneurship, the government unveiled a 300 billion rupee financing program for 750,000 farmers and expanded concessional lending schemes for small and medium-sized enterprises, youth and women entrepreneurs.

The budget proposals will be debated in parliament before final approval later this month. (1 U.S. dollar equals 278 Pakistani rupees) Enditem