ISLAMABAD: Pakistan is likely to raise its defence budget by nearly PKR 100 billion in the next fiscal year, according to a media report, as the government prepares its budget under an International Monetary Fund-supported reform programme that anticipates a significant increase in revenues.
The Dawn newspaper, citing the IMF staff report issued after the completion of the third review of the USD 7 billion Extended Fund Facility (EFF) and the second review of the USD 1.4 billion Resilience and Sustainability Facility (RSF), reported that defence expenditure for 2026-27 was estimated at PKR 2.665 trillion, up from PKR 2.564 trillion this year.
The IMF projected Pakistan’s total federal revenues for 2026-27 at PKR 17.144 trillion, more than PKR 2 trillion higher than the current fiscal year and representing a 13.5 per cent increase, the report said.
Pakistan has also committed to increasing the combined expenditure of the federal and provincial governments by 0.2 per cent of GDP to a total of PKR 4.227 trillion, while digitising all federal and provincial government payments by June 2027.
As part of broader reforms linked to the IMF programme, the government will identify the 10 most corruption-prone institutions by the end of this year for detailed analysis and audit. Provincial anti-corruption agencies are also expected to be strengthened.
The government has also undertaken not to introduce new incentives for special economic zones, export processing zones and special technology zones, while phasing out existing incentives by 2035 to create what the report described as a level playing field for all.
According to the report, authorities have maintained that apart from those living in absolute poverty and receiving social income support, around 40 per cent of the population remains economically vulnerable.
An IMF staff mission is currently in Pakistan to finalise budget proposals before the 2026-27 budget is presented to the cabinet and parliament early next month.
