Urooj Niazi 
here’s what you need to know as pakistan sets 2025‑26 budget
Pakistan Aims for 4.4% GDP Growth in Budget 2025–26
Pakistan is to finalize its federal budget for the fiscal year of 2025–26 with aspiration economic targets to accelerate areas of growth. Official sources indicate that the government will be proposing a GDP growth target of 4.4%, together with increased targets for agriculture, industry, and services. These proposals seem to indicate Pakistan’s attempt at achieving economic recovery, developing these sectors, whilst continuing with fiscal reforms. Pakistan has set a 4.4% GDP growth target in the federal 2025–26 budget.
Targets for corresponding sector-wise growth:
- Agriculture – 4.8%
- Industrial – 4.8%
- Services – 4.3%.
The proposed targets will first be considered at the Annual Plan Coordination Committee (APCC) meeting where they will then be approved by the National Economic Council (NEC).
Comparison with current fiscal year targets:
- GDP – 3.6%
- Agriculture – 2%
- Industry – 4.4%
- Services – 4.1%.
In a related issue, the International Monetary Fund (IMF) has asked Pakistan to discontinue federal funding for provincial development projects as part of informal virtual discussions on the new budget.
The IMF suggested that:
Provinces should internalize revenue and not rely on federally controlled project funding.
Income tax on agricultural income over Rs600,000 per year from July 1, 2025, with no exemptions.
These recommendations were formally made to help improve Pakistan’s fiscal independence for resource mobilization at the provincial level.
