3 days ago
Roundup: Pakistan targets 4.2 pct GDP growth for new fiscal year
ISLAMABAD, June 10 (Xinhua) -- Pakistan's Federal Minister for Finance and Revenue Muhammad Aurangzeb on Tuesday presented the federal budget for the fiscal year 2025-26, setting a gross domestic product (GDP) growth target of 4.2 percent, as the country aims to consolidate economic stability and promote inclusive, sustainable growth.
Addressing the budget session in the National Assembly, Aurangzeb said the total outlay for the federal budget stands at 17,600 billion rupees (about 63.18 billion U.S. dollars), which is 7 percent lower than the 18,900 billion rupees (about 67.84 billion dollars) allocated for the outgoing fiscal year.
The finance minister said the government is committed to building a competitive economy through structural reforms, fiscal discipline, and targeted relief measures, as outlined in the government's 5-E framework, which includes export, equity, empowerment, environment, and energy.
To support revenue generation, the government has set a tax collection target of 14,130 billion rupees (about 50.74 billion dollars), including 6,900 billion rupees in direct taxes and 7,200 billion rupees in indirect taxes. The non-tax revenue target stands at 5,150 billion rupees (about 18.49 billion dollars).
A total of 8,200 billion rupees (about 29.46 billion dollars) has been allocated for interest payments, accounting for nearly 47 percent of total expenditure.
The budget deficit is projected at 3.9 percent of GDP, while the government expects a primary surplus of 2.4 percent of GDP and a current account surplus of 1.5 billion dollars.
Aurangzeb added that the country anticipates remittance inflows of 37 to 38 billion dollars in the coming fiscal year, while consumer price index inflation is forecast at 7.5 percent.
The Public Sector Development Program has been allocated 1,000 billion rupees (about 3.59 billion dollars), focusing primarily on transport infrastructure and basic services aligned with sustainable development goals.
Pakistan has also raised its defense budget to 2,550 billion rupees (about 9.16 billion dollars), up from 2,120 billion rupees (about 7.61 billion dollars) in the outgoing fiscal year, representing an increase of over 20 percent.
The government has earmarked 1,055 billion rupees (about 3.79 billion dollars) for pensions, 1,186 billion rupees (about 4.26 billion dollars) for subsidies, and 1,928 billion rupees (about 6.93 billion dollars) for grants.
To provide relief to the salaried class, the government has reduced income tax rates across several brackets. Individuals earning between 600,000 to 1,200,000 rupees annually will now be taxed at 2.5 percent, down from 5 percent.
Other tax brackets have also been adjusted downward to ease the burden on middle-income groups.
Aurangzeb shed light on the agricultural sector, saying that fields were being revived under the Green Pakistan Initiative.
"Genetic improvement and post-harvest processes will be focused on," he said, adding that a total of 1,000 agriculture graduates had been sent to China on government-funded programs. He also announced five new livestock schemes.
The finance minister also announced that the government is preparing to issue its first Panda Bonds to access the Chinese capital market.
The new budget will take effect from July 1, following parliamentary approval and the president's assent.
