ISLAMABAD: Pakistan will unveil its annual federal budget for the coming fiscal year later on Tuesday, seeking to kickstart growth while finding resources for an expected hike in defense expenditure following the conflict with India last month.
Islamabad will also have to contend with remaining within the discipline of its International Monetary Fund program and the uncertainty from new trade tariffs being imposed by the United States, its biggest export market.
Media reports say the government is likely to present a 17.6 trillion rupee ($62.45 billion) budget for the fiscal year beginning July 1, down 6.7 percent from this fiscal year. It has projected a fiscal deficit of 4.8 percent of GDP, against a targeted 5.9 percent deficit in 2024-25, the reports say.
Analysts said they expect an increase of around 20 percent in the defense budget, likely offset by cuts in development spending.
Pakistan allocated 2.1 trillion Pakistani rupees ($7.45 billion) for defense in the outgoing fiscal year, including $2 billion for equipment and other assets. An additional 563 billion rupees ($1.99 billion) was set aside for military pensions, which are not counted within the official defense budget.
