Budget Deficit Set at Rs6.2T for FY 2025-26

Islamabad, June 9 — The federal government braces for a tough fiscal year, proposing a budget deficit of Rs6.2 trillion, or 4.8% of GDP, for 2025-26, with a total budget of Rs17.6 trillion—a 7.3% drop from this year due to slashed interest payment allocations, a news report reveals. Finance Minister Muhammad Aurangzeb will unveil his second budget speech on June 10, outlining a fiscal strategy amid tight expenditure constraints, leaving limited room for productive spending after defense and interest servicing.

The deficit, Rs2.3 trillion below this year’s estimate, aims for a 2% GDP fiscal consolidation (or Rs2.6 trillion) to hit 4.8% GDP, yet remains formidable. The Federal Board of Revenue (FBR) faces a Rs14.13 trillion tax target for 2025-26, but sources doubt its feasibility given missed targets this year. Non-tax revenue, at Rs5.2 trillion, hinges on the Petroleum Levy and State Bank profits, while borrowing Rs6.2 trillion will fund the gap. Under the IMF programme, provinces must save Rs1.33 trillion to cut the national deficit to 3.7% GDP, though Punjab’s Rs1.2 trillion and Sindh’s Rs995 billion development plans exceed the IMF’s Rs2.9 trillion cap.

Web context highlights Pakistan’s debt burden (e.g., 70% of GDP, web ID: 0), while posts found on X show public concern—some back consolidation, others fear cuts. Critically, the narrative of “fiscal discipline” may mask revenue woes—web sources note tax collection gaps, and X sentiment suggests distrust in implementation, hinting at economic strain.