Pakistan's 2024-25 Defence Budget: Same GDP Share Despite Increased Allocation

Pakistan has maintained its defence budget at 1.7% of GDP for 2024-25, despite increasing the allocation to Rs 2,122 billion, Rs 318 billion higher than the previous fiscal year. The spending distribution among the Army, Air Force, Navy, and inter-services organisations remains consistent, with salaries and employee-related expenses accounting for the largest budget share.

Pakistan's budgetary allocation of Rs 2,122 billion for the 2024-25 defence sector constitutes just 1.7% of the nation's GDP. Despite being higher than the Rs 1,804 billion allocated last year, this percentage mirrors that of the previous fiscal year.

Finance Minister Muhammad Aurangzeb revealed the Rs 18,877 billion heavily taxed budget for 2024-25, indicating an Rs 318 billion increase in defence funds from the previous year. The Pakistan Economic Survey 2023-24, released ahead of the budget, shows a steady decline in defence spending as a percentage of GDP since 2020.

Defence spending as a percentage of GDP has dropped from 2.6% in 2020 to a consistent 1.7% from 2023 to 2025. A significant portion of military-related expenses, such as Rs 662 billion for retired personnel, is categorized under civilian expenditures, obscuring the complete picture of defence spending.

This year's allocation maintains consistency in fund distribution for the Army, Air Force, Navy, and inter-services organisations since 2019, equitable with a 22.3% increase across categories. The largest budget chunk goes to employee-related expenses, followed by physical assets and operating expenses.

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