Pakistan’s federal budget for the fiscal year 2025–26, presented by Finance Minister Senator Muhammad Aurangzeb, outlines a comprehensive plan focused on institutional reform, financial discipline, and inclusive economic development. The government has emphasized a shift from short-term responses to long-term strategies aimed at stability and sustainable growth.

Key economic indicators suggest a recovery, with a reported primary surplus of 2.4 percent of GDP and inflation dropping to a two-year low of 4.7 percent. The current account is expected to post a surplus of $1.5bn, reversing a previous deficit. Pakistan has also seen increased international confidence, as reflected in improved credit ratings and rising remittances.

Central to the budget is the transformation of the Federal Board of Revenue (FBR), including the use of AI audits, e-invoicing, and expanded tax compliance efforts. The government reports progress in identifying non-filers, blocking fake refunds, and broadening the tax base. Structural reforms span various sectors, including tariff simplification, energy cost reductions, and reorganization of state-owned enterprises. Debt management measures and pension reforms are also part of the broader fiscal strategy.

The budget introduces targeted tax relief for salaried individuals and mid-sized corporations, alongside incentives for agriculture, SMEs, IT exports, and green economy initiatives. Development spending has been allocated across federal and provincial programs, with a focus on health, education, and social protection. The Benazir Income Support Program (BISP) has seen increased funding, and civil servant salaries and pensions have been adjusted.

Strategic investments have been outlined in agriculture, information technology, climate resilience, and mineral resources. Notably, the Reko Diq mining project is expected to generate substantial economic returns and employment.