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Pakistan Sets Rs1.126 Trillion Federal PSDP and Delays Budget as Gap Widens

Low use of prior development funds, IMF fiscal limits and a roughly Rs10 trillion throw-forward have left the government able to fund only high‑impact ongoing projects because extra fiscal space is blocked.

Overview

  • The Annual Plan Coordination Committee recommended a federal Public Sector Development Programme of Rs1.126 trillion and a national development outlay near Rs4.3–4.7 trillion after setting a 4% GDP growth target.
  • The Planning minister warned that ministries demanded about Rs4.1 trillion for projects, creating a near‑Rs3 trillion shortfall against the proposed PSDP.
  • Officials told the APCC that completing the existing pipeline will require roughly Rs10 trillion and that more than 98% of available federal resources should go to ongoing, high‑impact infrastructure such as transport, water and energy.
  • Low utilisation of allocated development funds — roughly Rs528 billion used of Rs1 trillion earmarked in July 2025–May 25, 2026 — and IMF conditions restricting fiscal moves have reduced room to expand the PSDP.
  • The NEC meeting and federal budget presentation were postponed while the government seeks IMF sign‑off and resolves coalition and provincial allocation disputes with a new budget date likely in the week after the original schedule.