By The federal government of Pakistan is gearing up to present its 2025-26 budget in early June 2025, marking a pivotal moment in the nation’s economic landscape. According to the Finance Division’s Budget Call Circular, the Finance Minister will also unveil the 2024-25 federal budget concurrently in Parliament, emphasizing continuity in financial planning. This year, both the National Assembly and the Senate will introduce the budget on the same day, streamlining the budgetary process.
Ambitious Tax Revenue Goals
In the previous fiscal year, the government set a tax revenue target of 13 trillion rupees (approximately $47 billion) for the fiscal year starting July 1. This goal represents a nearly 40% increase from the current year, which is critical for securing a new IMF bailout deal estimated between $6 billion to $8 billion. This economic strategy aims to stabilize Pakistan’s economy and prevent potential default.
International Bonds and Financial Stability
Additionally, the government plans to raise up to $1 billion through international bonds during the 2025-26 fiscal year, starting with a $300 million issuance in Chinese markets. This financial initiative underlines the government’s commitment to achieving fiscal prudence and promoting overall economic stability.
Increasing the Tax-to-GDP Ratio
The upcoming budget will focus on increasing the tax-to-GDP ratio from under 10% to 13% over three years. This strategic move aligns with the government’s efforts to seek financial assistance from organizations like the IMF and tackle ongoing fiscal challenges effectively.
Importance of the Federal Budget
The presentation of the federal budget in Pakistan is more than just a financial overview; it sets the stage for the country’s economic policies and priorities for the forthcoming fiscal year. The 2025-26 budget aims to shape the national economy and foster fiscal responsibility and growth.
Following its introduction in both houses of Parliament, the Lower House will deliberate on budgetary provisions for the next fiscal year, which will run until the end of June 2025. It is anticipated that the new budget will receive swift approval after these discussions.
