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ISLAMABAD: At a time when Pakistan’s economy is struggling to regain momentum, development spending has remained sluggish, with allocations reaching only 56 per cent and actual utilisation falling short by around 18pc during the first 10 months of the current fiscal year.
The utilisation under the Public Sector Development Programme (PSDP) reached 56pc despite a downward revision in the overall development outlay due to fiscal pressures, according to the Monthly Development Update (May 2026) released on Wednesday.
Actual spending under the PSDP amounted to Rs469.9bn during 10MFY26 against releases of Rs571.2bn, indicating a significant shortfall of 18pc in utilisation during the period.
The government has also scaled down the overall development outlay to Rs837.2bn from the originally projected Rs1,010bn for FY26, reflecting a cut of Rs172.8bn amid fiscal constraints. The ongoing conflict in the Middle East, along with prevailing fiscal pressures, has led to the adoption of several austerity measures, including the reduction in PSDP 2025-26 by Rs172.8bn.
