Pakistan’s New Budget Increases Defense Spending and Targets Higher Tax Revenues

The Pakistani government has unveiled its federal budget for the upcoming fiscal year, featuring a significant increase in defence spending and ambitious tax revenue targets. Aimed at securing a crucial new bailout program from the International Monetary Fund (IMF), the budget proposes consolidating fiscal stability through increased direct and indirect taxes. The government seeks to balance economic stabilization with growth targets amid ongoing inflation and external debt pressures.

• The budget sets an ambitious tax collection target of approximately 13 trillion rupees ($46.8 billion), representing a nearly 40% increase from the previous fiscal year.
• Defence spending has been increased to 2.12 trillion rupees ($7.6 billion), reflecting a rise of roughly 17.6%.
• The government has projected an economic growth rate of 3.6% for the fiscal year.
• The national fiscal deficit is targeted at 5.9% of the country’s Gross Domestic Product (GDP).
• The aggressive revenue targets are primarily designed to satisfy conditions for a new IMF loan program valued between $6 billion and $8 billion.

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