ISLAMABAD: The Pakistan government will likely present the Rs17.68 trillion budget for 2025–26 on June 10, news reported on Wednesday, citing well-informed sources.
According to the details, officials expect a sharp decline in the policy rate to cut spending on loans and interest payments by nearly Rs1,300 billion in the upcoming budget.
Sources suggest that the federal government may set the size of the upcoming budget at around Rs17.8 trillion, reducing it by Rs900 billion compared to the current fiscal year’s budget of Rs18.7 trillion.
The government will implement strict austerity measures in the upcoming 2025–26 budget, placing strong emphasis on reducing expenditures across various sectors.
Sources also indicate that the government will prohibit all federal ministries and departments from purchasing new vehicles. Additionally, it will require ministries to reduce their electricity and gas expenses.
The IMF has demanded that the government ban the issuance of unnecessary supplementary grants, sources said. They added that the government will allow emergency supplementary funds only in the event of natural disasters.
According to estimates, the federal government will likely allocate Rs8,685 billion for interest payments on loans. It expects to spend Rs7,503 billion on domestic debt servicing and Rs1,119 billion on servicing foreign debt.
The government also plans to allocate Rs1,367 billion for subsidies and Rs1,619 billion for grants.
The federal government expects the budget deficit for the next fiscal year to reach Rs6,632 billion. To help offset this deficit, it anticipates receiving a surplus of Rs1,220 billion from the provinces.
Furthermore, the government may allocate Rs716 billion to the Benazir Income Support Programme. It also plans to increase the quarterly cash stipend under the programme from Rs13,500 to Rs14,500 by January 2026.
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