Federal budget deficit estimated at PKR 7,222 Billion for FY 2025-26

Islamabad (Web Desk):The Ministry of Finance has estimated a federal budget deficit of PKR 7,222 billion for the upcoming fiscal year 2025-26, starting from July 1.

After accounting for debt payments, the federal government is expected to have only PKR 2,225 billion left for developmental projects, defense, salaries, pensions, subsidies, and grants. This suggests that the government may need to rely on loans to meet its expenditures.

According to sources in the Ministry of Finance, the federal budget deficit for the next fiscal year has been estimated at PKR 7,222 billion, or 5.5% of GDP. However, a provincial surplus of PKR 1,360 billion is also expected.

When the provincial surplus is factored in, the overall budget deficit is projected to reduce to PKR 5,862 billion, or 4.4% of GDP.

The total federal revenue for the upcoming fiscal year has been estimated at PKR 19,111 billion, with PKR 15,270 billion expected from tax revenue through the Federal Board of Revenue (FBR), and an additional PKR 3,841 billion from non-tax income.

After the transfer of PKR 8,780 billion to provinces under the NFC Award, the federal government’s net income is estimated to be PKR 10,331 billion.

In the next fiscal year, after paying PKR 8,106 billion in interest, the federal government will be left with only PKR 2,225 billion to cover all other expenditures.

According to the Ministry of Finance, the total federal expenditure for the upcoming fiscal year is estimated to be PKR 17,553 billion. The largest portion of these expenditures will be interest payments, with other costs including defense, pensions, salaries, development budgets, subsidies, and grants.