Pakistan Government Finalizes 2026-27 Federal Budget and Development Plans

Updated: 8:27 PM PKT — June 1, 2026

Prime Minister Shehbaz Sharif has announced that the upcoming federal budget will include new measures aimed at strengthening industrial growth and national production. Following a meeting with business leaders from across the country, the premier directed the Federal Board of Revenue (FBR) to clear all outstanding tax refund claims by June 15. He also assured exporters that the Export Finance Scheme rate would remain fixed at 4.5 percent until June 2027.

During the meeting, business representatives expressed support for government initiatives, including the privatisation of Pakistan International Airlines and the digital transformation of the FBR. This comes as the FBR has reportedly missed its tax collection target by Rs 868 billion during the first 11 months of the fiscal year.

Updated: 6:23 PM PKT — June 1, 2026

The government has set an economic growth target of 4% and an inflation target of 8.2% for the upcoming 2026-27 fiscal year. The macroeconomic framework was cleared by the Annual Plan Coordination Committee (APCC) and has been forwarded to the National Economic Council (NEC) for formal approval.

The plan projects a 3.9% expansion in commodity-producing sectors, driven by 3.8% growth in agriculture and 4% in industry, while the services sector is targeted to grow by 4.2%. The government also aims to create two million new jobs, with 1.1 million in services, 500,000 in industry, and 400,000 in the agriculture sector.

Updated: 4:50 PM PKT — June 1, 2026

The Punjab government has decided to propose a tax-free budget for the upcoming fiscal year, aiming to provide public relief while increasing revenue through other means. The provincial tax collection target is expected to be set at approximately Rs 712 billion, while the development budget is proposed at Rs 1,452 billion.

A key feature of the budget proposal is the move to make local bodies autonomous, with a proposed allocation of Rs 250 billion to empower them. The budget will also continue subsidy programs for farmers, students, and laborers, including support for tractors, solar tube wells, and educational schemes. A significant allocation of over Rs 550 billion is expected for the transport and local government sectors combined.

Updated: 4:19 PM PKT — June 1, 2026

Pakistan is aiming for a 4% GDP growth rate in the upcoming fiscal year 2027, an increase from the estimated 3.7% in the current year, despite challenges from international crude price shocks and an ongoing IMF programme. The growth is anticipated to be driven by strong performances across the agriculture, industry, and services sectors.

Projections indicate the agriculture sector will accelerate to 3.8% growth, while the industrial sector is expected to expand by 4%. The services sector is forecast to post a steady growth of 4.2%, with the information and communication segment remaining a key driver with a projected 7.7% expansion.