The federal government has set priorities for the upcoming budget 2026-27, emphasising green growth, climate resilience, and support for the salaried class, while projecting a GDP growth of 5.1 percent for the next fiscal year.
The Finance Ministry has outlined the main priorities for the new fiscal year. Inflation is expected to remain contained at 6.5 percent. The budget will focus on green taxes, non-tax revenue, and climate-related subsidies, reflecting the government’s push toward sustainable development.
All ministries have been directed to identify environmental and climate-related expenditures. Separate tagging of income and spending related to climate change will now be mandatory. A strengthened disaster budgeting framework will ensure better preparedness for natural calamities.
Non-tax revenues will be assessed for their environmental impact, and levies on polluting activities will be linked to climate targets. Green revenue will focus on addressing energy, transport, and pollution challenges. Subsidies will be categorized into climate adaptation and mitigation, agricultural insurance, climate infrastructure adaptation, clean energy, and electric vehicles. Transparency and achievement of environmental goals will be central to the budget.
Budget preparation timeline
The Ministry of Finance has issued a budget call circular to initiate preparations for 2026-27. Key milestones include:
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February 2026: Submission of revised revenue and expenditure estimates, and development project details.
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March 30 – April 12: Budget Review Committee meetings.
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April 15: Exchange rate information provided.
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April 20: Budget strategy paper approval.
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April 21 – 25: Issuance of current and development budget ceilings.
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May: Annual Plan Coordination Committee and National Economic Council meetings.
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End of May: Completion of all budget documents.
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June 30: Submission of quarterly budget estimates.
Relief for salaried class
The government is also preparing for the third economic review with the International Monetary Fund (IMF), expected next month. Completion of the review could unlock the next $1 billion tranche for Pakistan.
Officials said the government is focusing on securing relief for the public, salaried class, and industrial sector. The Prime Minister has instructed that new priorities be set for IMF negotiations, with proposals and concrete recommendations to be submitted within the next two weeks to ensure public relief measures.
