Pakistan Unveils Rs18.77 Trillion Budget with Higher Defense Spending

Finance Minister Muhammad Aurangzeb presented an Rs18.771 trillion ($67.49 billion) federal budget for fiscal year 2026-27 to the National Assembly, targeting 4% GDP growth and 8.2% inflation. Defense spending was raised roughly 17.6-18% to Rs3.01 trillion ($10.8 billion), including a 39.62% jump in funding for physical defense assets covering J-35 stealth fighter, Hangor-class submarine, and HQ-19 missile-shield programs amid heightened tensions with Afghanistan and India. The Federal Board of Revenue was set a Rs15.264 trillion tax-collection target, with Rs1 trillion allocated to the Public Sector Development Programme and Rs838 billion to the Benazir Income Support Programme, as Islamabad sought to sustain its IMF-backed fiscal recovery.