Pakistan’s federal budget for fiscal year 2026–27 is now likely to be presented in parliament on June 10 or June 12 after delays triggered by unresolved negotiations with the International Monetary Fund and disagreements over provincial development spending, official sources said.
The delay follows the postponement of a scheduled meeting of the National Economic Council, which was set to take place on June 3. According to a notification issued by the Cabinet Division, the meeting has been deferred, with a revised date yet to be announced.
Budget Schedule Revised
The federal budget was initially expected to be presented on June 5, while the Pakistan Economic Survey 2025–26 was due to be released a day earlier. However, officials decided to revise the timeline after a virtual meeting between Pakistani authorities and the IMF failed to resolve key fiscal issues.
Provinces, Spending at Core of Dispute
Sources said a major reason for the delay is the federal government’s effort to persuade provinces to voluntarily align their development budgets with national priorities, including defence and security spending.
Following the Seventh National Finance Commission Award, provinces received a significantly larger share of national resources. For FY2026–27, combined provincial development spending is projected at Rs. 3.138 trillion. Punjab alone has proposed a development outlay of Rs. 1.41 trillion.
In contrast, the federal public sector development programme has been capped at Rs. 1.126 trillion, prompting internal discussions on whether provinces should assume greater fiscal responsibility to ease pressure on federal finances.
IMF Targets Remain a Major Hurdle
Another critical challenge is the lack of agreement with the IMF on revenue measures and expenditure cuts needed to achieve a primary surplus target of 2 percent of GDP, equivalent to around Rs. 2.9 trillion, in the next fiscal year.
Officials said the IMF has refused to lower the Federal Board of Revenue tax collection target for FY2026–27, which remains fixed at Rs. 15,264 billion. This is despite a downward revision in the current year’s target from Rs. 13,979 billion to Rs. 13,428 billion.
Actual tax collection for the outgoing fiscal year is now projected at around Rs. 13,000 billion, meaning the FBR would need to generate an additional Rs. 2,264 billion next year to meet the IMF-backed goal.
Revenue Gap Adds Pressure
Even with projected nominal economic growth of 12.2 percent, based on 4 percent real GDP growth and 8.2 percent inflation, normal tax collection is expected to reach only about Rs. 14,560 billion. This would still leave a shortfall of nearly Rs. 700 billion.
Some reports have suggested that the upcoming Gilgit-Baltistan legislative elections may also have influenced the delayed announcement. However, senior finance officials maintain that the primary reason is the inability to finalise budget figures internally and with the IMF.
As a result, the budget presentation date remains subject to confirmation, with authorities continuing efforts to resolve outstanding fiscal issues before formally unveiling the FY2026–27 budget.
