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2mo ago

NEC Approves Development Plan and Macroeconomic Targets, Clearing Path for June 12 Budget

The council’s June 10 decisions set spending and growth targets and secure a provincial grant package that lets the government proceed under IMF fiscal limits.

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Overview

  • The National Economic Council met on June 10 and approved a Rs3.66 trillion national development outlay while setting a 4% GDP growth target and an 8.2% inflation ceiling for FY2026-27.
  • Federal negotiators and the Pakistan Peoples Party reached a financial understanding that will channel more than Rs1.2 trillion in provincial grants to the centre without formally changing the National Finance Commission revenue formula.
  • Parliament was summoned for budget business on June 10 and Finance Minister Muhammad Aurangzeb is expected to present the federal budget in the National Assembly on June 12.
  • Key budget measures, including proposed tax relief for salaried workers and revenue targets, remain conditional on agreement with the IMF under Pakistan’s $7 billion Extended Fund Facility.
  • The NEC pact prioritises defence funding and a constrained federal PSDP, requires provinces to trim or reallocate development plans, and will influence IMF tranche timing because high debt servicing and reserves pressure leave little fiscal room.