Islamabad, June 10, 2025: The government has set its economic growth target at 4.2% for the upcoming financial year, with inflation projected to average 7.5%, according to budget documents released on Tuesday. The Finance Minister confirmed these figures while presenting the budgetary framework to cabinet members.
Official estimates suggest the budget deficit will remain at 3.9% of GDP, with a primary surplus of 2.4% expected. These projections indicate the government’s continued focus on fiscal discipline while attempting to stimulate economic activity.
Revenue Streams and Provincial Shares
On the revenue front, tax authorities aim to collect 14.13 trillion rupees through FBR, with 8.2 trillion rupees allocated as provincial shares from the federal divisible pool. Non-tax revenues are estimated at 5.15 trillion rupees, contributing to a net federal income of 11.07 trillion rupees after provincial transfers.
Sector-Wise Allocations
The defense sector remains a top priority with 2.55 trillion rupees allocated in the budget. Social protection programs feature prominently, with 716 billion rupees earmarked for the Benazir Income Support Programme to assist 10 million vulnerable families. Pension expenditures account for 1.06 trillion rupees, reflecting growing civil service liabilities.
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Energy subsidies receive substantial funding at 1.19 trillion rupees, while infrastructure development gets 328 billion rupees, including 100 billion rupees specifically for the Karachi-Chaman Highway project.
Development Spending and Fiscal Challenges
National development programs are allocated 4.22 trillion rupees in total. However, economic analysts suggest meeting these targets will require strict expenditure controls and improved revenue collection. The projections come as Pakistan continues negotiations with the IMF, with these figures likely to influence ongoing discussions about the country’s economic stabilization program.
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The budget reflects the government’s attempt to balance economic growth objectives with fiscal responsibility, though challenges remain in managing inflation and ensuring revenue targets are met. Implementation will be key to determining whether these projections translate into tangible economic improvements.
