The federal government is expected to unveil a Rs17.68 trillion budget for the fiscal year 2025–26 on June 10, according to sources. This figure marks a reduction of Rs900 billion compared to the current fiscal year’s budget of Rs18.7 trillion.
One of the key highlights of the upcoming budget is a projected saving of Rs1,300 billion due to an anticipated decline in the policy rate, which will help lower debt servicing costs. The budget is expected to allocate Rs8,685 billion for interest payments, with Rs7,503 billion for domestic and Rs1,119 billion for foreign debt servicing.
Also Read: Federal Budget 2025-26 To Feature Tax Hikes And Major Development Spending Boost
Strict austerity measures will be at the core of Budget 2025–26. New vehicle purchases for federal ministries will be banned, and departments will be required to reduce their electricity and gas consumption. In line with IMF recommendations, the issuance of unnecessary supplementary grants will also be restricted.
The budget also includes Rs1,367 billion for subsidies and Rs1,619 billion in grants. Additionally, Rs716 billion is likely to be allocated to the Benazir Income Support Programme, with quarterly stipends increasing to Rs14,500 by January 2026.
