The federal government is set to present the budget for the fiscal year 2026-27 in the National Assembly today (Friday), with an estimated outlay of around Rs17.5 trillion.

Minister for Finance and Revenue, Senator Muhammad Aurangzeb, will present the budget 2026-27 before the National Assembly, the session of which will begin at 3pm.

Sources said that the government is expected to set a tax revenue target of Rs15.267 trillion, while Rs7.824 trillion has been earmarked for debt servicing. The proposed defence allocation is expected to stand at Rs3 trillion.

Sources added that the government is also considering an increase in salaries and pensions of government employees. The budget is expected to include a plan to collect Rs1.727 trillion through the petroleum levy.

For the upcoming fiscal year, the government is likely to set an export target of $32.8 billion and an import target of $70 billion.

No new development schemes are expected to be launched under the budget, with resources instead being focused on the completion of ongoing projects.

Sources further said the government may withdraw the tax exemption currently available to the former Federally Administered Tribal Areas (Fata).

Ahead of the budget presentation, Prime Minister Shehbaz Sharif has summoned a federal cabinet meeting at Parliament House at 2:30pm today to approve the proposed budget.

Finance Minister Aurangzeb will brief cabinet members on key features of the budget before its formal presentation in parliament.

Meanwhile, the opposition has decided not to boycott the budget session.

The decision was taken during a joint parliamentary party meeting of opposition parties, which resolved to continue protests both inside and outside parliament.

Opposition leaders also reiterated their demand for a meeting with and release of Pakistan Tehreek-e-Insaf (PTI) founder Imran Khan, vowing to continue their protest campaign until such a meeting takes place.

‘Economy grows 3.7pc in FY26’

A day earlier, the government unveiled the Pakistan Economic Survey (PES) for FY2025-26, with FinMin Aurangzeb saying that Pakistan’s gross domestic product (GDP) hit its highest-ever size — 3.7pc — but the South Asian nation missed its growth target due to external shocks.

Flanked by his cabinet colleagues, the FinMin told journalists that the nation — hit severely by an energy crisis due to Middle East tensions — missed its projected growth target of 4% despite recording its highest GDP growth of 3.7% in four years.

The GDP growth rate was at 3.7% against the envisaged target of 4.2%. Inflation rebounded in the aftermath of US-Iran war and entered double digits. Exports declined, imports surged, the FBR’s tax collection target was missed and public debt in absolute figures ballooned in 2025-26.

Per capita income rose to $1,901 in 2025-26 compared to $1,751 in the previous fiscal year. The size of Pakistan’s economy in dollar terms touched $452 billion in FY26 against $408 billion in the previous fiscal year. In rupee terms, the size of the economy stood at Rs126.9 trillion, showing an 11.3% increase from the previous year’s Rs114 trillion. The exchange rate remained stable at Rs280.65 per US dollar compared to Rs279.35 per US dollar in FY2025.

Net foreign direct investment recorded inflows of $1.4 billion, led by China and Hong Kong, with the power sector and financial services attracting the largest shares. As of April 17, 2026, foreign exchange reserves stood at $20.6 billion, including $15.1 billion held by the State Bank of Pakistan (SBP), reflecting strengthened external buffers. During July to March, the fiscal deficit stood at 0.7%, while the primary surplus was 3.2%. During July to March, the current account surplus stood at 72 million dollars.

“This Economic Survey for 2025-26 narrates the story of the outgoing fiscal year. Three major factors tested Pakistan’s resilience — tariff war, floods hitting the largest province of the country and ME conflict — resulting in lower growth, while inflation also rebounded,” Aurangzeb stated.

The poverty rate in Pakistan stood at 28.9%, and the unemployment rate went up to 7.1% in 2024-25.

The minister said that Pakistan would have to avoid a boom-and-bust cycle, as accelerated growth resulted in the creation of twin deficits; however, the government did not repeat this kind of higher growth. He said that there were no sacred cows and everyone would have to pay their due taxes.

The agriculture sector recorded a growth of 2.89%, driven by important crops and livestock. The industrial sector posted a growth of 3.51%, supported by sharp growth (6.11%) in large-scale manufacturing (LSM). The services sector, as the largest contributor to GDP (58.42% of GDP), expanded by 4.09%, supported by strong growth in information and communication services (7.52%).