Pakistan's Defence Budget Boost Amid Escalating Tensions

Pakistan is set to unveil its annual federal budget, predicting a substantial increase in defence expenditure to address escalating tensions with India. The proposed budget size is Rs 17.6 trillion, targeting a 4.2% GDP growth and limiting inflation to 7.5% for FY-2025-26.

Pakistan's federal government is preparing to introduce its annual budget on Tuesday, forecasting a significant rise in defence expenditure amid recent conflicts with India. The anticipated budget size is expected to be Rs 17.6 trillion, reflecting strategic priorities for the upcoming fiscal year.

Finance Minister Muhammad Aurangzeb will present the financial plan, forecasting nearly Rs 14 trillion in revenue—a 22 per cent rise from the previous year. The government aims for a 4.2 per cent GDP growth and an inflation cap of 7.5 per cent for FY-2025-26, marking ambitious economic targets.

Increased defence spending is a central component, following the April 22 Pahalgam terror attack and subsequent military actions. An 18 per cent hike in defence expenditure has been backed by major political parties, underscoring security concerns as Pakistan navigates complex regional tensions.