Islamabad: The Ministry of Finance has projected a substantial allocation of Rs2.34 trillion for defense expenditures in the fiscal year 2025-26, according to its recently released Medium-Term Macroeconomic Framework. This decision comes as part of a broader economic strategy aiming to enhance national security amidst anticipated economic improvements.
The report forecasts an optimistic economic outlook for the next fiscal year, with GDP growth expected to rise to 4.8% and inflation anticipated to decrease from the current rate of 12% to 7.5%. These projections are seen as key indicators of economic stabilization and growth.
The Federal Board of Revenue (FBR) is expected to achieve a tax revenue increase to Rs15,555 billion, with non-tax revenues projected to hit Rs3,851 billion. Additionally, the petroleum levy is anticipated to generate Rs1,388 billion.
However, the report also highlights a considerable financial deficit of Rs9,655 billion, compounded by an interest bill on loans exceeding Rs10,000 billion. Total expenditure on loan interest is forecasted at Rs10,283 billion.
On the external front, exports are predicted to reach $37.95 billion and remittances are expected to total $31.70 billion. The pension bill is projected to increase to Rs1,166 billion, with civil affairs expenses estimated at Rs881 billion.
In addition to the defense allocation, the government plans to invest Rs1,480 billion in development projects, reflecting a commitment to balancing national security with infrastructure and development priorities.
The Medium-Term Macroeconomic Framework outlines the government’s strategic approach to fiscal management, aiming to bolster economic stability and growth while navigating significant budgetary and financial challenges.
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